Ofgem is proposing changes to how energy storage is licensed and classified.
It believes storage should be treated as a form of generation and therefore plans to modify the existing generation licence to make it fit for storage.
The regulator says the modified licence will provide regulatory certainty to storage facilities, encourage deployment of the technology into the system and will ensure a level playing field so it can compete fairly with other sources of flexibility.
The proposed changes are also expected to address the issues storage facilities face surrounding final consumption levies – currently some storage could face double charging at the time of both importing from and exporting electricity to the grid.
Ofgem is consulting on introducing the new licence condition, which requires the licensee to ensure self-consumption isn’t the primary function when operating the storage facility.
The regulator expects it to come into effect in the first half of 2018.
It is seeking views until 27th November 2017.