South Somerset District Council and Opium Power Limited are partnering to build a new 25MW energy storage facility.
They say the battery system will provide essential power management assistance to the National Grid and enable more intermittent renewables in the form of local wind and solar to come onto the network.
The project will store excess energy production at low usage periods and resupply it to the grid when needed at peak times, helping avoid power spikes or blackouts.
The project partners expect it to be rolled out and operational by the end of 2018.
They have suggested a further phase could follow in the future to increase the capacity of the facility.
South Somerset District Council Leader Ric Pallister said: “Our team has worked incredibly hard to secure an exciting investment which will not only help the environment but also provide invaluable revenue to help protect and strengthen vital services for our communities.”