The UK’s energy storage landscape is shifting, as sustainable energy developer SAE reaches financial close on a 240-MWh battery energy storage system (BESS) at the Uskmouth Sustainable Energy Park in Newport, Wales.
With £67.4 million in committed debt and equity financing, the Afon Wysg 1 (AW1) project represents the latest phase in repurposing a former coal-fired power station into a critical node in the UK’s low-carbon infrastructure.
SAE, which owns a 75.3% stake in the AW1 project vehicle, will contribute £3.1 million in equity and £11.1 million in shareholder debt to AW1 Energy Storage Ltd (AWES), the holding company behind the project. Its partner, BESS Investment UK Ltd, will add £4.2 million in equity and a £3.6 million loan. German lender Nord/LB is providing £45.3 million in non-recourse financing—signalling growing international appetite for UK battery storage assets amid intensifying demand for grid flexibility.
The AW1 facility is expected to be grid-connected by October 2026 and commence commercial operations in Q1 2027. SAE anticipates average annual revenues of £13 million during its first five years of full operation—revenue likely derived from energy arbitrage, capacity market payments, and grid-balancing services such as frequency response.
Notably, AW1 is just one of four planned storage projects at the Uskmouth site, which could ultimately host up to 3.5 GWh of capacity. A 460-MWh battery is already under construction, positioning Uskmouth as one of the UK’s most ambitious energy storage hubs. The site’s transformation highlights a broader national trend: the adaptive reuse of legacy fossil fuel infrastructure to support the UK’s net-zero power system.
The strategic location of Uskmouth—near key transmission corridors and industrial demand centres—adds further value. As the UK grid grapples with variable renewable generation and peak demand mismatches, large-scale BESS assets like AW1 will be central to maintaining system reliability and price stability. National Grid’s Future Energy Scenarios forecast the need for over 20 GW of storage by 2030 to support the UK’s renewable ambitions.
With battery costs having declined more than 80% over the past decade and market volatility increasing due to solar and wind penetration, merchant battery projects are becoming increasingly bankable. SAE’s decision to pursue financing for AW1 ahead of confirmed government contracts reflects growing confidence in storage market fundamentals.
Still, the success of projects like AW1 hinges on efficient delivery, effective participation in multiple energy markets, and the ability to scale. The potential expansion of AW1 to 480 MWh, as suggested by the developer, will likely depend on performance benchmarks, policy stability, and the economic return of initial phases.
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