The UK’s National Energy System Operator (NESO) has not awarded any contracts to battery energy storage systems (BESS) in the second round of the Stability Market. According to an analysis by market intelligence firm Modo Energy, all battery submissions were unsuccessful at the technical assessment stage.
Synchronous condensers and open cycle gas turbines (OCGTs) have secured 7.3 GVA worth of contracts for inertia services. This aligns with NESO’s announcement that five contracts were awarded across four providers for the delivery period from October 2026 to September 2027.
This development has caused frustration within the storage sector, as it follows the Stability Pathfinder Phase 2 programme. This initiative saw NESO award contracts totalling £323 million, including to grid-forming battery projects, demonstrating how non-thermal technologies can provide stability services like inertia.
Modo Energy analyst Zachary Jennings highlighted on LinkedIn that some batteries that failed in Round 2 are already operational and hold active Stability Pathfinder contracts. He noted that Round 2 introduced additional technical requirements, including ‘fixed H constants’, necessitating participants to commit to specific, non-variable inertia values for grid-forming technologies during tender and connection phases.
Jennings suggested that while tightening thresholds could be beneficial, it is crucial for requirements to be clearly communicated before developers commit to design parameters.
Responses to Modo’s analysis on LinkedIn show a divide in opinions. Some commenters believe the Stability Market’s eligibility criteria continue to favour synchronous or thermal assets over zero-carbon alternatives. Others argue that the system operator is rightly cautious, considering the critical nature of inertia procurement for maintaining grid stability.
NESO has positioned the Stability Market as its enduring, long-term mechanism for procuring stability services, contrasting with the Pathfinder approach, which has been used to test and validate newer solutions. With the conclusion of Round 2, developers are now questioning whether future rounds will offer clearer guidance on the technical thresholds grid-forming batteries must meet, and if the market framework will evolve swiftly enough to reflect the capabilities of the technology.
