Compressed Air Energy Storage could be the solution to Britain’s struggling energy system. As renewable energy generation continues to accelerate, the UK is struggling to keep up with increased clean energy capacity. We are lacking the infrastructure needed to store and distribute this clean power effectively. This gap is threatening to slow down our energy transition, keeping us reliant on fossil fuels and energy imports during periods of low renewable output.
While lithium-ion batteries dominate the current storage landscape, alone they cannot support the demands of a fully decarbonised energy grid. Long duration energy storage (LDES) is needed in parallel with the short duration storage already deployed. By bridging the gap between intermittent generation and consistent energy demand, LDES systems like compressed air energy storage (CAES) support grid resilience, enable the future of hydrogen economy, and can help decarbonise heavy industry.
The UK’s Existing Energy Storage Framework
The UK’s energy storage capacity currently hinges on two main technologies: battery energy storage systems (BESS) and pumped storage hydro (PSH).
BESS
Battery energy storage systems, particularly lithium-ion batteries, have become the go-to solution for short-duration applications. They offer rapid response times, flexibility in deployment, and are highly effective for grid services like frequency regulation. They be installed almost anywhere, from urban substations to remote renewable generation sites, making them ideal for location-specific energy balancing.
However, batteries are primarily suited for storing electricity over minutes to a few hours, not days or weeks. They degrade over time, with performance and capacity diminishing. Additionally, they rely on finite and geopolitically sensitive raw materials such as lithium, cobalt, and nickel. Mining these resources raises environmental and ethical concerns, and their volatile global supply chains create cost uncertainty. Batteries also carry a higher risk of thermal runaway (which can cause fires or explosions), requiring rigorous safety measures.
PSH
Pumped storage hydro offers an alternative at the other end of the spectrum, long-duration storage with very high capacity. It operates by pumping water to a higher elevation during periods of low demand and releasing it using gravity through turbines to generate electricity. PSH is reliable, efficient, and capable of storing and discharging large amounts of energy over several hours or even days, making it valuable for large-scale grid stability.
However, PSH comes with its own set of constraints. It depends on very specific topographies, typically mountainous areas with sufficient elevation difference and huge surface capacity to build large reservoirs. The UK has only a handful of suitable sites. Most of these are either already in use by Britain’s 4 active plants or face significant planning and environmental hurdles. The infrastructure costs and development timelines are also substantial, and the ecological impact of altering watercourses or constructing new reservoirs can be contentious.
While BESS and PSH each play a crucial role in the UK’s evolving energy system, both leave notable gaps particularly in terms of scalable, long-duration, and environmentally resilient storage solutions.
Bridging the Gap with Compressed Air Energy Storage
Where battery systems are constrained by short-duration capacity and material dependencies, and pumped hydro is limited by geography and scale, Compressed Air Energy Storage (CAES) offers a robust, long-duration solution that can fill the gaps in our current storage infrastructure.
CAES systems store surplus renewable electricity by compressing air and injecting it into underground geological formations such as salt caverns or disused oil and gas wells. When power is needed, the stored air is released, heated, and expanded through turbines to generate electricity. Storelectric’s Green CAES technology enhances this process by capturing and reusing the heat generated during compression. This dramatically improves round-trip efficiency and eliminates the need for fossil fuels during re-expansion, making the process emissions free.
Key Advantages of CAES
Long-Duration and Seasonal Storage
CAES can store energy for days, weeks, or even seasonally, making it uniquely equipped to handle prolonged periods of low renewable generation such as extended Dunkelflaute events. This long-term balancing capability is something batteries cannot deliver at grid scale.
Resource and Supply Chain Resilience
Unlike batteries, CAES does not rely on critical minerals or rare earth elements. Its core components air, water, and conventional industrial machinery are abundant, safe, and globally available. This reduces exposure to geopolitical risks and volatile mineral markets, making CAES more resilient and economically stable.
Broad Geographical Viability
Unlike pumped hydro, CAES does not require specific surface topology . It can be deployed anywhere with suitable underground geology, including the repurposing of decommissioned fossil fuel infrastructure. Brownfield sites can also be given new life with a CAES plant installation. This flexibility significantly broadens the number of viable sites, particularly in a land-constrained country like the UK.
Small Surface Footprint
Because most of the storage infrastructure is underground, CAES facilities require minimal land at surface level. This reduces land-use conflicts with local communities, while also preserving natural landscapes and green spaces.
Hydrogen Co-Location
As an added benefit, CAES systems can be directly integrated with green hydrogen production. Electrolysis, the process of using electricity to split water into hydrogen and oxygen, requires a consistent and efficient power supply. This can be incredibly costly. Storelectric’s Hydrogen CAES patent captures the thermal energy generated during air compression and uses it to catalyse electrolysis. The thermal energy recovery reduces the electricity required per kilogram of hydrogen produced, making the process more cost-effective and emissions-free. This creates a dual-purpose system that provides both energy storage and efficient green hydrogen production.
Rapid Deployment and Site Repurposing
Because CAES uses established industrial components and existing subsurface geology, facilities can be developed quickly and at lower cost than many other long-duration storage technologies. Retired fossil fuel infrastructure can be adapted, accelerating the transition to clean energy while giving new life to industrial legacy energy assets.
The UK’s Momentum Towards Compressed Air Energy Storage
The UK has significantly advanced its support for long-duration energy storage (LDES) in 2025, recognising its role in achieving net-zero targets and ensuring energy security.
Cap and Floor Scheme for LDES
In April 2025, Ofgem opened the first application window for the UK’s LDES cap and floor scheme. This framework offers a minimum revenue floor to mitigate investment risks and a cap to protect consumers from excessive returns. The scheme is in place to unlock climate financing for LDES projects.
Governmental and Legislative Support
The UK government reaffirmed its commitment to long-duration energy storage (LDES) through the Great British Energy Act 2025, which created Great British Energy (GBE), a publicly owned company tasked with supporting renewable energy infrastructure. GBE has designated energy storage as critical national infrastructure and is already launching funding schemes, including targeted investment in rural areas willing to host critical technologies.
Industry Developments
LDES is becoming more prevalent in industry. Notably, £300 million has been invested to develop a 300 MWh liquid air energy storage facility in Carrington, Manchester. Additionally the £1.5 billion PSH scheme at Loch Lochy in the Scottish Highlands, aims to double the UK’s existing storage capacity
These initiatives underscore the UK’s strategic shift towards embracing LDES as critical to the future energy system. With growing interest in diverse storage technologies, the stage is set for CAES.
Final Thoughts
Compressed Air Energy Storage is a huge opportunity for the UK to bridge the gaps in our current storage infrastructure.
The future of energy is not just renewable, it’s storable, dispatchable, and resilient.
