Invinity warns UK investment could move overseas after Ofgem LDES selections

Invinity Energy Systems is reconsidering its UK manufacturing plans after only one of 21 eligible long-duration electricity storage projects proposing its vanadium-flow batteries entered Ofgem’s provisional first-round portfolio.

Chief Executive Jonathan Marren told The Times that the company must now decide what to do with its UK facilities and whether to focus more heavily on opportunities in the US and Europe.

“We’ve got to make decisions pretty quickly about what we do with our UK facilities,” he said.

The 21 eligible applications were submitted by four developers and represented around 16.7 GWh of potential demand for Invinity’s technology. 20 were intended for delivery by 2030, with one in Ofgem’s later 2033 track.

Only Frontier Legacy was included among the 16 projects provisionally selected by Ofgem in June.

The project has a total capacity of 520MWh and is expected to split that capacity roughly equally between Invinity’s vanadium-flow batteries and zinc-halide technology. Invinity initially welcomed its inclusion, saying Ofgem had specifically identified the presence of vanadium-flow technology as a factor in reaching its minded-to decision.

Despite the initial positive reception, the wider result has now raised questions over whether there will be enough domestic demand to justify further expansion of Invinity’s UK manufacturing operations.

The company has already received substantial funding from the public purse. The then UK Infrastructure Bank, now the National Wealth Fund, invested £25 million in Invinity in 2024 as part of a £56 million fundraising. The investment was intended to support commercial development of its long-duration storage technology and expansion of its manufacturing footprint in Scotland, including a second site alongside its operation in Bathgate.

Invinity later estimated that the full 21-project pipeline could support up to 1,000 permanent UK jobs if every project went ahead. 

How did Ofgem make its assessment

Invinity is unhappy that only one of the proposed projects using its technology was ultimately included in the 16 of the projects provisionally selected. It’s especially painful for the firm as it was dedicated to expanding its UK manufacturing base, while many of the projects that were selected used Chinese technologies instead. However, Ofgem’s assessment has to take into account both technology diversity and wider economic benefits.

Its Multi-Criteria Assessment combines cost assessment and system modelling with economic, financial and strategic assessments. Ofgem has also said economic growth, job creation and domestic supply-chain development can be considered as non-monetised economic benefits.

On technology diversity, the regulator has said it may include a lower-ranked project using a different technology where doing so has only a limited effect on its assessment of socio-economic welfare. It has also made clear that diversity will not be pursued ‘at all costs’.

That makes the issue more complicated than a straightforward choice between British and overseas battery technology. Ofgem says the purpose of the assessment is to identify the portfolio offering the best overall value to consumers.

Its provisional Window 1 portfolio covers 16 projects across pumped hydro, lithium-ion batteries, compressed-air storage and vanadium-flow technology. Together they represent around 7.6 GW and 137 GWh of storage.

The cap-and-floor scheme was introduced to give long-duration storage projects greater revenue certainty. Operators are protected by a minimum revenue floor, while revenue above an agreed cap is shared with consumers.

Of course, Ofgem’s selections remain provisional. Its consultation closed on August 14 and the regulator is reviewing responses before publishing its final decision later in autumn 2026. 

Invinity is hoping that its latest intervention could force Ofgem’s hand, although the regulator may ultimately decide the risk of Invinity directing investment to other markets isn’t necessarily outweighed by the potential cost of moving forward with more of the projects using the company’s technology.