Why the UK is the World's Third Largest Installed BESS Market

And what Europe can learn from it

A Conversation with Mike Longson, BESS Analyst at Cornwall Insight

2026 is shaping up to be a defining year for battery energy storage. Clare Nasir sat down with Mike Longson—an energy storage specialist with over a decade of experience spanning research, asset optimisation and market analysis—to understand why the UK's approach to BESS deployment offers lessons for markets worldwide.

You've worked across the global energy storage sector. What makes the UK market stand out?

Mike Longson: It really comes down to transparency. The UK has taken an exceptionally open approach to how it shares market data. National Grid publishes almost everything—connection queues, asset availability, dispatch notifications, real-time system data—and makes it publicly accessible. Whether you're an asset owner, an optimiser like the firms I've worked for, or a research analyst, everyone can see the same information and draw their own conclusions about what's happening on the system.

This level of visibility simply doesn't exist elsewhere in Europe. It creates an environment where the entire industry can learn, adapt, and optimise collectively. That's a huge competitive advantage.

You mentioned this transparency reveals both strengths and weaknesses. What's been the UK's biggest challenge?

There's been a legacy issue with gas generation being dispatched instead of battery storage, even when batteries would be more economical. It comes down to duration requirements—gas plants can run indefinitely as long as fuel flows, whereas most batteries can only deliver for a couple of hours.

But here's what's fascinating: this isn't framed as a technology battle anymore. At the Energy Storage Networks conference late last year, the industry consensus shifted.

We're not asking "why aren't you using us instead of gas?" We're asking "why are you using the most expensive flexibility tool when cheaper alternatives exist?" It's become about consumer benefit and system efficiency rather than technology advocacy.

And the good news? We're seeing notable improvements.

If we'd had this conversation in 2023, I would have said the situation was awful. But we've made significant progress through 2024 and 2025. The momentum is real.

The UK government has set ambitious targets: 27GW of battery storage by 2030. Is that achievable?

Absolutely.

We have 6.8 GW operational and another 6.5 GW under construction. That means we need roughly 12-14GW over the next four to five years—slightly above our recent pace but well within the approved pipeline. The fundamentals are strong: we have over 60GW approved through planning.

The Clean Power 2030 commitment provides the policy certainty investors need. Unlike markets facing political volatility, UK developers know the government is committed across multiple election cycles. That stability is invaluable.

Let's talk about revenue. We've heard frequency services are becoming saturated. Should developers be concerned?

It's a transition, not a crisis. In 2022, frequency services represented about 80% of BESS revenue in the UK. Now it's flipped—energy arbitrage is approaching 80%, and we're projecting the Balancing Mechanism will dominate by 2030.

This evolution was always inevitable as storage capacity scaled.

The exciting part is that energy arbitrage opportunities actually expand as renewable penetration increases.

Wind and solar now provide nearly 50% of UK electricity—up from basically zero in 2005. That creates exactly the price volatility that makes storage profitable.

Here's the crucial point: declining battery prices are improving investment cases for new projects by lowering capital costs. So even though revenue per megawatt-hour might be compressing in some markets, the economics work because the upfront investment has fallen dramatically.

What about duration? Are two-hour batteries becoming obsolete?

Not at all—in fact, we're seeing something counterintuitive. The UK's cap and floor mechanism for long-duration storage targets eight hour-plus systems. You'd expect everyone to build four-hour batteries as a middle ground, right? But that's not happening; some are taking the risk that there will be this middle-ground opportunity. 

The majority of developers are making a binary choice: build two-hour systems that are economical for the next four to five years, or go all the way to eight-plus hours for the long-duration auction.

The gap in between doesn't make economic sense right now. It's fascinating to watch investment decisions optimising around these market signals. What is even better is that this will likely change again within the next couple of years as the connection reform is finanlised queue is firmed up and the different duration buckets have a clear idea of their competitive peers. 

The Trump administration's policy shifts have dominated headlines. Has that impacted UK and European markets?

Less than you'd think. The threatened tariffs on Chinese batteries mostly became a US problem. China essentially said "we'll pass the costs to consumers"—and US developers had little choice but to accept it because there aren't alternative suppliers at scale yet.

For Europe, we didn't see the oversupply and price drops some anticipated from systems being redirected out of the US market. Most projects are working on two-year lead times anyway—you're ordering batteries now for 2027-2028 delivery. The supply chain doesn't react as quickly as news cycles suggest.

Recent events in the Middle East have seen oil and gas prices spike sharply. How does that change the conversation around energy storage?

It's a reminder, really. Not a surprise — a reminder.

If you look back over the past fifty years, energy security crises have almost always had a geopolitical trigger. The 1973 oil embargo was the moment the UK and much of Europe woke up to how exposed they were — dependent on imported fossil fuels flowing through supply chains they had no control over. That shock is what drove the first serious government investment in alternatives. North Sea oil bought us some breathing space, but it was never a permanent answer, and we always knew that.

Fast forward to today. Iran's severe disruption to shipping through the Straight of Hormuz has removed a significant portion of global LNG supply almost overnight. Gas prices have spiked. Consumer bills are under pressure again. And we're having the same conversation we had in 1973, in 2008, after Ukraine in 2022 — about vulnerability, about exposure, about the cost of depending on fuel that travels through volatile regions before it reaches our grid.

What's different now is that we actually have the answer. That's what makes this moment so significant.

Renewables have scaled. Solar and wind are producing nearly 50% of UK electricity. The economics are unrecognisable from even a decade ago. But the missing piece has always been storage — because the sun doesn't always shine and the wind doesn't always blow, and without the ability to store that energy, you remain dependent on dispatchable generation, which largely means gas.

BESS closes that loop. Home-produced, clean, dispatchable electricity — stored when supply exceeds demand, released when the system needs it. No fuel costs. No geopolitical exposure. No supply chain threading through the Strait of Hormuz, or via pipelines/connections to Europe.

Every time an event like this unfolds, the strategic case for battery storage becomes harder to argue against. The technology is there. The costs have fallen dramatically. The infrastructure is being built. What events like this do is sharpen the urgency — for policymakers, for investors, for the public. The argument for energy independence isn't abstract anymore. It's on people's energy bills.

We have moved on from fossil fuel imports being our only option. The solutions exist. What we need now is the will to deploy them at the pace this moment demands.

Your experience spans research, asset ownership and optimisation. Where do you see consolidation happening?

The supply chain is definitely consolidating. It used to be that you'd go to different suppliers for different elements—one company for development and planning, another for construction, a third for optimisation. Now we're seeing vertical integration.

Fluence, for example, handles complete construction packages. But the really interesting trend is owners bringing optimisation in-house. Gore Street Capital is a prime example—they've internalised trading and optimisation rather than contracting it to third parties. This gives them full visibility across the value chain and captures more revenue.

The flip side is that it requires serious capability building. You need algorithmic trading systems, 24/7 trading desks and cybersecurity protocols. If someone hacks your automated trading system and starts dispatching your assets, you could cause real grid instability —it's a legitimate risk that has to be managed.

Speaking of trends, what's the biggest misconception you hear about UK energy storage?

Probably the narrative around curtailing wind generation. People see headlines about paying wind farms to turn off and assume it's a massive waste of money. But it's actually more nuanced.

We've given wind farm owners contracts guaranteeing they can generate when conditions allow. Now it's the system operator's responsibility to deliver that power to demand centres—and we haven't built the transmission infrastructure fast enough. So yes, we pay for curtailment, but we also pay even more to turn other generations, like gas, on to meet demand.

What people miss is that gas plants don't typically run at full capacity anyway. If we ran our gas fleet at 100% and had to pay them to curtail, what would that cost?

The wind curtailment issue is temporary—it resolves once we build out the transmission network and interconnections between generation and demand (Scotland to England) but is further supported by BESS build-out. As we’ve mentioned earlier exposure to global gas prices, regardless of whether it comes from the US, the Middle East or the North Sea, and geopolitical exposure will persist indefinitely. 

As we continue into 2026, what keeps you excited about this sector?

Honestly? The pace of change. This industry didn't exist fifteen years ago, and you blink and something fundamental has shifted. Compare that to sectors like green hydrogen, where you're waiting until 2040 to see if things materialise, or renewables, where everything has pretty much been done before already, so there is limited innovation.

With storage, we're seeing policy evolution, revenue model transitions, technology improvements, and market maturation all happening simultaneously. Take an example day this winter, a cold snap on a Monday saw the entire battery fleet exported to meet peak demand, exactly as designed. This market is providing its own signals for what it needs and what works, seeing the system work in real-time, watching all these pieces come together, is incredibly satisfying

The UK has the world's third-largest installed battery storage market — only China and the United States have more installed capacity. What can Europe learn from that?

The honest answer starts with transparency.

The UK built market confidence by making data open and accessible to everyone. Developers, investors, grid operators — they all work from the same information. That shared visibility accelerates learning, builds trust and attracts international capital. It sounds simple, but it's genuinely rare. Most European markets are still working across fragmented data systems with inconsistent formats.

The second lesson is policy specificity. The UK didn't just set a renewable energy ambition — it named a number. 25-27 GW of battery storage by 2030, backed by a published pipeline. That single act converted investor interest into investor commitment. There's a meaningful difference between the two.

It would be wrong to suggest the UK's journey maps directly onto 27 sovereign nations, each with its own regulatory framework, market structure and political priorities.

The EU operates on an entirely different scale of complexity.

What works in a single-grid, single-regulator market doesn't automatically translate across a two-tier system where Brussels sets the ambition and member states determine the execution. That gap between policy and delivery is where progress slows.

However, like the UK, the trajectory is positive.

Any final thoughts for developers or investors looking at the UK market?

The UK has built a sophisticated, mature market ecosystem. Developers understand how to optimise revenue across multiple streams. Financing structures have evolved beyond basic debt-equity. The institutional knowledge is deep.

That sophistication will accelerate the next growth phase. We're not starting from scratch—we're building on proven models with £1+ billion investments from the likes of Masdar, Copenhagen Infrastructure Partners, and others demonstrating international confidence.

The fundamentals are sound: strong policy support, increasing renewable penetration creating arbitrage opportunities, and an island grid that structurally needs storage. The UK is positioned to remain Europe's leader through 2030 and beyond.

That's exactly what Nikola Kindlova's report Full Charge: Scaling Europe's Battery Energy Storage Systems explores in depth. It's a detailed look at where both the UK and EU markets stand right now — the progress made, the momentum building and the steps needed to scale further. Both markets are moving in the right direction. Read it below.

Download the full BESS Global Market Analysis 2026 report for comprehensive insights into cost trends, deployment patterns, and regional market dynamics shaping the energy storage revolution.

FULL CHARGE. UK and EU BESS REPORT, Green Executives.pdf

Download PDF • 23.16MB

About Mike Longson Mike Longson is a BESS specialist with over 10 years' experience in the sector. His career spans roles at S&P Global (research), Gore Street Capital (asset commercialisation), enspired (algorithmic optimisation) and currently at Cornwall Insight, where he focuses on European and UK market analysis. Mike has been involved in developing policy frameworks, optimising operational assets and providing strategic market intelligence across the global energy storage landscape.