Independent power producer Econergy Renewable Energy Ltd. has reached financial close on a 40MW / 120MWh battery energy storage system (BESS) project in Dalmarnock, Scotland, marking a further step in the UK’s transition towards a more flexible electricity system.
The project has secured £21 million in project finance from Santander UK and will operate under a long-term optimisation agreement with EDF.
Battery storage and grid flexibility
Battery energy storage is increasingly recognised as critical infrastructure for balancing electricity systems with high levels of renewable generation. Assets such as the Dalmarnock BESS help manage price volatility, reduce curtailment and support grid stability.
The Dalmarnock project is a three-hour duration asset, enabling it to respond to longer periods of supply and demand imbalance compared with shorter-duration systems.
Revenue certainty through optimisation
Under the agreement with EDF, the project benefits from a guaranteed minimum income level, providing revenue visibility while retaining exposure to market upside. This structure is designed to balance downside protection with participation in wholesale and ancillary service markets.
Such optimisation agreements are increasingly used to improve the bankability of standalone storage projects, particularly as the UK electricity market evolves.
Financing confidence in UK storage
The financial close demonstrates growing lender confidence in battery storage as a long-term asset class. For Santander UK, the Dalmarnock project represents its first funding of a three-hour duration BESS.
Industry observers note that longer-duration assets are likely to play an expanding role as renewable penetration increases and price spreads widen.
Scaling the UK storage pipeline
The Dalmarnock project forms part of Econergy’s wider UK pipeline, which includes 17 storage projects totalling nearly 3GW.
As the UK accelerates deployment of renewable generation, investment in energy storage is expected to remain a key enabler of system reliability, cost control and decarbonisation.
