The Electricity System Operator (ESO) issued connection contracts with accelerated connection dates for 10 GW of battery energy storage system (BESS) projects at the start of 2024, covering 21 projects1. The figure appears in the ESO's first Annual Balancing Cost Report, published in May 2024, which reviews balancing costs and sets out the operator's initiatives to reduce them1.
The report states that overall balancing costs fell to £2.4 bn in 2023/24 from £4.1 bn in 2022/23, and that net balancing volumes fell to 10.8 TWh, well below the 2020/21 peak of 21.4 TWh1. Thermal constraint costs were the largest single component of balancing costs, at 40% in 2023/24 against 36% in 2022/231. Reserve costs fell and reserve volumes declined from 5.7 TWh in 2022/23 to 4.8 TWh in 2023/241.
On the household share of these costs, the report says Balancing Services Use of System (BSUoS) charges contributed to around 4% of electricity bills for an average domestic consumer in 2023/24, which it puts at about £4 a month on a typical domestic electricity bill1. The ESO projects balancing costs to rise out to 2030, with constraints the main driver, and says its initiatives create savings worth around £18 bn before 20301.
"At the start of 2024, the ESO issued connection contracts with accelerated connection dates for 10 GW of BESS."
The report does not name the 21 projects, their locations, their capacity individually, or the dates to which their connections were accelerated. It also does not state how much of the 10 GW is operational, under construction or awaiting build. None of this has been reported in the document1.
| Measure | 2022/23 | 2023/24 |
|---|---|---|
| Total balancing costs | £4.1 bn | £2.4 bn |
| Net balancing volumes | Not given | 10.8 TWh |
| Thermal constraint share of balancing costs | 36% | 40% |
| Reserve volumes | 5.7 TWh | 4.8 TWh |
| BSUoS share of a typical domestic electricity bill | Not given | ~4%, about £4 a month |
Why it matters for households
Balancing costs are recovered through BSUoS charges and so reach domestic bills, though the ESO puts the 2023/24 share at roughly £4 a month for a typical household1. The contracts described here concern grid-scale battery storage, which provides services used in balancing the grid and holding frequency. Faster connection of storage affects how much of the system's balancing need is met by batteries rather than by turning generation up or down, which is the mechanism behind thermal constraint costs1. The report frames network build as the most impactful lever on balancing costs, noting new network can take up to 14 years to build, longer than connecting new generation, producing a lag between the two1. For a household, the practical link is indirect: the size and speed of the storage fleet feeds into the balancing component of bills, which the ESO expects to rise to 2030 before its own initiatives offset part of the increase1. The report does not quantify what the 10 GW of accelerated BESS connections will save, or how they will affect household bills1.
What happens next
The report gives no dated milestones for the 21 projects or their accelerated connection dates1. It records that the second Review of Electricity Market Arrangements consultation was published on 12 March 2024, seeking feedback on options with the potential to reduce thermal constraint costs, and that the ESO set out network recommendations for the 2030s in its Beyond 2030 report in March 20241. The ESO's role and remit are set out in its capacity as the National Energy System Operator; connection arrangements for new projects are covered under getting a new or upgraded electricity connection.
Sources1 cited
- PowerPoint Presentation, neso.energy