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The Importance of Co-Location In The UK’s Energy Future
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Kate McCann
- 3 minute read
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Read MoreAs the UK intensifies efforts to decarbonise its energy system and reach net-zero emissions by 2050, attention is shifting towards more innovative and efficient infrastructure solutions. One strategy gaining momentum is co-location – the development of multiple energy assets, such as solar or wind alongside battery energy storage systems (BESS), at the same site with a shared grid connection.
This approach is not new, but recent advances in policy, economics, and technology are bringing it into sharper focus. With electricity demand expected to double by 2050 and grid capacity constraints already apparent, co-location is emerging as a practical method to maximise land use, reduce connection delays, and improve energy system flexibility.
This approach is not new, but recent advances in policy, economics, and technology are bringing it into sharper focus. With electricity demand expected to double by 2050 and grid capacity constraints already apparent, co-location is emerging as a practical method to maximise land use, reduce connection delays, and improve energy system flexibility.
What is Co-Location?
Co-location refers to the installation of two or more energy technologies – most commonly renewable generation and energy storage – at the same geographic location, sharing infrastructure and a single grid connection. In the UK, the most frequent pairing involves solar photovoltaic (PV) or onshore wind generation with BESS, allowing surplus electricity to be stored during peak generation and dispatched when demand rises or generation dips.
From a grid perspective, co-location offers efficiency by avoiding the duplication of physical infrastructure and reducing the pressure on transmission capacity. From a business standpoint, it improves revenue certainty, spreads investment risk, and enhances project economics
Why Now?
Several factors are accelerating the uptake of co-located energy projects in the UK:
Benefits of Co-Location
Co-location offers a range of practical and economic benefits. By sharing grid connections and on-site infrastructure, project developers can lower both capital expenditure and ongoing operating costs. Hybrid sites can access multiple revenue streams, including generation tariffs, wholesale energy trading, and participation in balancing or frequency response services.
Additionally, co-located systems are better positioned to respond to market price signals, enabling more flexible operations and potentially improving return on investment. These features make co-location an increasingly attractive model for renewable energy developers and investors.
Challenges and Considerations
Nonetheless, challenges remain. The regulatory framework is still adapting to the nuances of co-located assets, with questions around grid access, market participation, and connection agreements still under discussion. Integrating intermittent generation with battery systems also demands advanced control software and accurate forecasting to operate effectively.
On the financial side, modelling returns for hybrid systems is more complex, often requiring detailed assumptions across multiple technologies and markets. These technical and policy uncertainties can make financing and delivering co-located projects more difficult, particularly for new entrants.
On the financial side, modelling returns for hybrid systems is more complex, often requiring detailed assumptions across multiple technologies and markets. These technical and policy uncertainties can make financing and delivering co-located projects more difficult, particularly for new entrants.
Case Studies and Market Momentum
Recent projects across the UK have demonstrated the viability of co-location. Several developers have integrated BESS with solar PV at both small and utility scale, including re-powering older sites and new greenfield developments. The Energy Networks Association and National Grid ESO are actively engaging with industry to streamline processes and improve clarity around hybrid asset management.
In Scotland and Wales, where wind resources are abundant, co-located storage is being explored as a way to reduce curtailment and improve local grid resilience. These developments align with regional net-zero targets and community energy initiatives.
In Scotland and Wales, where wind resources are abundant, co-located storage is being explored as a way to reduce curtailment and improve local grid resilience. These developments align with regional net-zero targets and community energy initiatives.
As the UK prepares for a future dominated by low-carbon, decentralised power systems, co-location is set to play a strategic role. It addresses pressing challenges around grid congestion, intermittency, and land use, while also unlocking new business models and investment opportunities.
For policymakers, regulators, and energy firms alike, accelerating the deployment of co-located assets will require coordinated planning, consistent regulation, and the right market incentives. As these pieces come together, co-location may well shift from an emerging strategy to a central part of the UK’s net-zero future.