UK Grid Operator Faces Criticism Over Battery Storage Underutilization

Figure 1: Visual representation of the BeyondTrust vulnerability chain

Energy industry stakeholders raised concerns about National Grid ESO's utilization of battery storage assets during the first quarter of 2025. According to reporting from Renews.biz, battery operators and industry groups argued that procurement mechanisms and dispatch decisions were not optimizing the use of available storage capacity.

The criticism focused on several aspects of grid operations, including the volume of battery capacity procured for balancing services, the frequency with which procured capacity was actually dispatched, and the price signals sent to storage operators through wholesale and ancillary service markets.

National Grid ESO operates the electricity transmission system and is responsible for balancing supply and demand in real time. The operator procures various services from generators, storage operators, and demand-side participants to maintain system frequency within acceptable limits.

Industry stakeholders argued that battery storage assets were being underutilized relative to their technical capabilities and the services they could provide. Battery operators pointed to periods when their assets sat idle despite being available and technically capable of providing grid services.

The criticism also addressed procurement volumes for frequency response services. Some industry participants contended that National Grid ESO was procuring less battery capacity than optimal, potentially relying more heavily on traditional generation assets for balancing services.

National Grid ESO has previously stated that it procures services based on system needs and cost-effectiveness. The operator has also noted that battery storage participation in various markets has grown substantially in recent years.

At the time of reporting, the installed battery storage capacity connected to the GB transmission and distribution networks exceeded 3 gigawatts, with additional projects in development.

Figure 2: How the authentication bypass vulnerability works

Increased utilization of battery storage could improve grid efficiency and reduce balancing costs. Batteries can respond faster than conventional generators to frequency deviations, potentially providing more effective frequency response services.

Higher utilization rates would improve the economics of battery storage projects, potentially accelerating investment in additional capacity. Better revenue certainty could reduce financing costs for new projects.

More effective use of storage could also reduce curtailment of renewable generation. When wind or solar output exceeds demand, batteries can absorb excess generation for later dispatch, reducing waste.

Grid operators in other markets have demonstrated that high battery utilization is achievable. Australia's National Electricity Market, for example, has seen battery storage play an increasingly prominent role in frequency control services.

Battery storage has technical limitations that affect its suitability for certain grid services. Most grid-scale batteries can sustain full output for one to four hours, limiting their role in longer-duration balancing needs.

Increased reliance on battery storage for grid services requires careful management of state of charge. Batteries dispatched for frequency response must maintain sufficient charge to respond to both upward and downward frequency deviations.

The economics of battery storage depend on multiple revenue streams, including wholesale market arbitrage, capacity payments, and ancillary services. Changes to any of these revenue sources affect project viability.

Procurement mechanisms designed for conventional generators may not optimally capture the capabilities of battery storage. Adapting market rules and procurement practices takes time and requires careful consideration of system security implications.

Figure 3: Privilege escalation from user to SYSTEM level

Electricity systems must maintain a continuous balance between generation and demand. Any imbalance causes the system frequency to deviate from its nominal value of 50 Hz in the UK.

Grid operators procure various services to maintain frequency within acceptable limits. Frequency response services provide automatic adjustments to generation or demand in response to frequency deviations. Reserve services provide additional capacity that can be dispatched manually when needed.

Battery storage can provide frequency response services by rapidly adjusting its charging or discharging rate. A battery that is partially charged can increase its discharge rate when frequency falls or increase its charging rate when frequency rises.

The speed of battery response represents a key advantage over conventional generators. Batteries can reach full output within milliseconds, while thermal generators typically require minutes to change output significantly.

Technical context (optional): Grid-scale lithium-ion batteries typically achieve round-trip efficiency of 85 to 90 percent, meaning that 85 to 90 percent of the energy used to charge the battery can be recovered during discharge. Degradation over time reduces both capacity and efficiency.

The debate over battery utilization reflects broader questions about how electricity markets should evolve to accommodate new technologies. Market rules and procurement mechanisms designed for conventional generators may not optimally value the capabilities of storage and other flexible resources.

Similar discussions are occurring in electricity markets worldwide as storage deployment accelerates. Grid operators are experimenting with new products and procurement approaches to better integrate storage into system operations.

The UK has positioned itself as a leader in electricity market reform, having introduced various innovations in ancillary service procurement. The outcome of the current debate could influence approaches in other markets.

Investment in battery storage continues to grow despite the utilization concerns. Developers appear confident that market reforms and increasing renewable penetration will improve storage economics over time.

Confirmed:

• Industry stakeholders raised concerns about National Grid ESO's utilization of battery storage
• The UK has over 3 gigawatts of installed battery storage capacity
• Battery storage can provide faster frequency response than conventional generators

Unclear at time of reporting:

• The specific utilization rates achieved by battery storage assets in recent months
• Whether National Grid ESO planned changes to procurement practices in response to the criticism
• The optimal level of battery procurement given current system needs and costs
• How utilization rates in the UK compare to other electricity markets

Monitor National Grid ESO announcements regarding changes to ancillary service procurement or market design. The operator periodically reviews and updates its procurement approaches.

Track published data on battery storage dispatch and utilization rates. National Grid ESO publishes various operational data that can indicate how storage assets are being used.

Watch for responses from industry groups and battery operators regarding their engagement with the grid operator on utilization concerns.

Observe developments in other electricity markets that may provide models for improved storage integration. Australia, California, and Germany have all implemented various approaches to storage procurement and dispatch.

Follow investment trends in UK battery storage projects. Continued investment despite utilization concerns would suggest confidence in future market improvements.