Last fall, the U.K. government reached out to players across the electricity industry for suggestions on how to reform the grid. Now industry observers are expecting the country's energy storage market to take a major leap forward if legislation is enacted this spring.

The U.K. is set to become “the world’s best market for scaling up storage,” said Simon Daniel, CEO of energy storage developer Moixa.

“There’s a perfect storm on its way,” thanks to a combination of new government promotion programs, a deregulated electricity market and a high adoption of solar, said Daniel. 

The legislative changes should be implemented after the government finishes mulling over the results of a recent industry consultation on how to make the grid smarter and more flexible. 

Joe Warren, managing director of storage developer Powervault, said the laws will “focus on removing barriers and opening up access to electricity markets through smart tariffs and more stable network charging regimes.”

U.K. government officials have been warming to storage, most recently announcing funding for £9 million (USD $11 million) worth of projects. Storage advocates remain hopeful that the government will integrate their suggestions for market reform.

David Capper, deputy director and head of future electricity networks at the U.K.’s newly created department of Business, Energy and Industrial Strategy (BEIS), has expressed the need to encourage markets for flexibility services.

Removing the regulatory barriers for storage are a major priority for BEIS, Capper said. He also believes developers should be allowed to stack revenues.

Some regulatory changes boosting the prospects for storage are already underway. The regulator Ofgem is planning to separate management of the distribution system from National Grid's management of the U.K. transmission system in order to encourage competition and improve flexibility.

The new distribution system operator role will allow for greater coordination with the regional network operators to help speed up the grid connection process for new projects, according to the Renewable Energy Agency. 

The U.K. energy storage market will also benefit from growing demand for grid-connected balancing services, said Powervault's Warren.

“The National Grid has predicted a doubling of spending on balancing services to approximately £2 billion ($2.5 billion) per year by 2020, and as an island nation we also have a significant need for flexible technologies to ensure our energy security,” he said. “We are therefore ideally placed to develop these technologies and to export our expertise internationally.”

Solar is also favoring U.K. storage. There are now 858,000 homes with rooftop solar, compared to around 1 million in the U.S. “But unlike in California, where there’s a lot of air conditioning, the sun doesn’t shine at the right time,” said Moixa's Daniel.

Like much of northern Europe, the demand for electricity in the U.K. is driven by a 4 p.m. to 8 p.m. domestic peak, “which offers plenty of opportunity for behind-the-meter storage,” he said.

Powervault's Warren highlighted highlighted three specific areas where he wanted to see action: “First, the government needs to follow through on its commitment to ensure that all barriers to smart tariffs are removed. Second, more stable network charging regimes should be established that reward customers for the real value of home electricity storage. Finally, a commitment should be made to avoid burdening early-stage technologies with additional regulation.”