Privately held commodities company Vitol Group has teamed up with renewable energy investment fund Low Carbon Ltd. to form a new venture, VLC Energy, that will install a 50 MW, 35 MWh storage system in the U.K. as its first project.
The new venture says it could invest up to £250 million ($311 million) in the development of energy storage and distributed energy projects in the U.K., according to Bloomberg.
- The first project, involving two lithium-ion batteries from NEC Energy Solutions, will be a “multi-million-pound investment” to provide frequency response to utility National Grid, the companies told the outlet.
The U.K. has carved out a niche for energy storage, and the market is reacting. Energy storage projects won 6% of the U.K.’s capacity market auction in December.
Last August National Grid awarded contracts for energy storage systems to provide it with enhanced frequency response.
Among those projects are a 40 MW installation in Glassenbury and a 10 MW facility in Cleator that are being developed by the new joint venture, VLC Energy.
NEC is providing turnkey construction and operation and maintenance for the project. Construction is already under way, and the system is expected to be in service by November.
Vitol is participating in the project via VPI Immingham affiliate, which owns one of the largest combined heat and power plants in Europe.
“These battery sites will pave the way for more renewable energy sources, such as solar power and wind energy, to be connected to the U.K.'s overall power mix by helping to balance energy supply and demand more effectively,” Justin Thesiger, operations director at Low Carbon, said in a statement.