Lisa Mackay, COO at Fidra Energy, says ‘economies of scale’ helped the UK Thorpe Marsh project secure considerable financial backing – she adds that, in the UK, increases in intermittent energy sources and growing electricity demand is an opportunity for batteries to provide ‘flex’
Fidra Energy is developing the largest battery storage project in the UK, the 1.45GW / 2.9GWh Thorpe Marsh scheme in Yorkshire. The financial cost of the project is enormous – Fidra secured around £1billion of capital from EIG and the National Wealth Fund, alongside a group of international lenders, to fund the build. The sheer scale of the project meant Fidra had to overcome many challenges before reaching financial close on the scheme. This was partly because the battery energy storage system (BESS) developer had to conduct route to market offtake negotiations, as well as concurrently secure debt and equity investment.
Fidra secured up to £445 million of equity investment from EIG and the National Wealth Fund (NWF), as well as £594 million in loan facilities from a group of international lenders. Fidra has signed long-term offtake agreements with EDF, Octopus Energy and Statkraft for around 80 per cent of the Thorpe Marsh project’s capacity. In addition, in March last year , the project secured a fifteen-year capacity market award from the UK Government commencing in October 2028. EIG has said Thorpe Marsh is a “pivotal UK infrastructure asset”.
Economies of scale
In an exclusive interview with Tamarindo insight director Ben Cook, Lisa Mackay, Fidra Energy’s chief operations officer and a panellist at the upcoming Investing in Battery Energy Storage 2026 conference in London, said reaching financial close on Thorpe Marsh was especially challenging because “we were running, in parallel, route to market offtake negotiations, we were running an equity process and we were running a debt process with the banks to bring this all to a close”. Mackay added that the project was successful in securing considerable financial backing partly because it offered “economies of scale”. She explained: “The amount of effort lenders and advisors are putting into the process is inevitably not significantly smaller for much, much smaller battery cases. So, if they’re going to do something and invest the time, effort and money in it, doing it at scale I think makes logical sense.”
In addition, the fact that the strategy from the outset was to ensure that 50 per cent of Thorpe Marsh’s revenue was contracted was crucial, Mackay said. “We were quite clear up front that our intention was to contract that and we would do that ahead of financial close,” she explained. “That’s why our offtake strategy was so important to us because we had to prove that we could execute that in order to give comfort around that. I know there’s been a lot of discussion about financing of merchant batteries and obviously we would love to have more merchant capacity, but I think the good thing is, because of the scale of our project, we are able to have a hybrid
strategy so we can lock in a significant amount of fixed revenue, but also have that opportunity to make the most of the market.”
Increased electrical demand in the UK
Mackay also said that, in the UK, increased electrification would drive up demand for storage. She explained: “I think we probably all agree that, with the sheer volume of renewables planned, intermittent generation generally, you need to be able to store that when it’s in surplus and have it when you’ve not got renewable energy to supply there. We’ve got to believe in the electrification of the UK system, so we do expect demand to increase. So if you look at intermittent coupled with increased electrical demand, we think the gap is flex.”
Mackay said the question then was how to provide the “flex” that traditionally would have been provided by gas. “Batteries are currently the obvious solution to provide that and it’s got to get bigger. You’ve got so much gas still in the system, something has got to be of a significant size to be able to do that. So I think that storage is required and I think large scale is needed. You’re always going to get debates about how much of it is needed, I think there’s probably a finite number of projects, but I think it’s definitely required and I hope that we will encourage more large-scale projects, which we hope to do ourselves.”
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