Invinity Faces Setback in Ofgem's LDES Scheme, Threatens UK Manufacturing Shift

Invinity Faces Setback in Ofgem's LDES Scheme

British vanadium flow battery manufacturer Invinity Energy Systems has faced a significant setback in the UK's push for long-duration energy storage. Despite being lined up to supply 21 projects, Invinity was selected for only one project in Ofgem's long-duration energy storage cap-and-floor scheme shortlist. The regulatory framework heavily favored lithium-ion batteries, which are typically sourced from China, leaving domestic innovators struggling to secure necessary support.

Manufacturing Threats and Funding Clashes

In response to the lack of domestic orders resulting from Ofgem's provisional portfolio, Invinity CEO Jonathan Marren has warned that the company may divert its attention to the US and Europe. This strategic shift threatens to reconsider UK manufacturing plans that were originally expected to create up to 1,000 jobs in Scotland. Vanadium flow batteries are renowned for their safety and long cycle life, making them ideal for grid-scale applications, but initial capital costs remain a barrier without robust revenue mechanisms.

National Wealth Fund Dilemma

This development creates a stark clash with recent government investments. The taxpayer-owned National Wealth Fund recently invested 25 million pounds in Invinity to accelerate deployment and UK manufacturing. However, the provisional cap-and-floor portfolio may leave the company without enough domestic orders to fulfill the expansion goals tied to this substantial public funding.

A developer behind projects planning to use Invinity's vanadium flow batteries warned that securing finance without Ofgem's cap-and-floor revenue support would be challenging, potentially causing projects to be delayed or never built.

The situation highlights the critical need for policy alignment between government funding initiatives and regulatory market mechanisms to ensure the viability of domestic long-duration storage technologies.

This article was assisted by AI analysis. Please refer to the original source for official information.