The new rules will help households generate and store electricity and sell it back to the National Grid.
The first phase of a four-year £246m Government investment into battery technology has been launched in a move that could help bring down household electricity bills.
The long-term vision includes creating giant battery facilities around the National Grid to store excess wind and solar energy for when demand rises.
In addition, new rules will help households with solar panels to generate and store their own electricity with new battery technology and sell it back to the Grid when they do not need it.
They will also reduce costs for people and businesses who power down appliances at peak times and use electricity at cheaper times.
The Government and Energy regulator Ofgem estimate that consumers could save between £17bn and £40bn by 2050.
Business and Energy Secretary Greg Clark unveiled details of the first phase, known as the Faraday Challenge, on Monday.
This includes a £45m competition to establish a centre for battery research which he said would help make the UK a world leader in the design, development and manufacture of electric batteries.
This will be spearheaded by the Engineering and Physical Sciences Research Council (EPSRC) to bring the best minds and facilities together to create a ‘battery institute’ to make products more accessible and affordable.
A three-month consultation earlier this year on an industrial strategy to increase UK productivity and growth attracted more than 1,900 written responses from businesses and organizations.
A shift to cleaner energy and technologies such as electric cars has made the design, development and manufacture of batteries a top industrial priority.
Mr Clark said: “A smarter energy system will create new businesses and high-skilled jobs, while making sure our infrastructure is able to cope with demand.”
Gareth Redmond-King, head of climate and energy at WWF, said battery storage was a “game-changer” in the ability to produce clean power from renewables.
“These technologies give us flexibility to run on solar when the sun isn’t shining, and be powered by wind when it is still.
“It will support the transition to electric cars and enable our homes to be more efficient – which means cheaper, as well as cleaner and greener energy.”
Dr Jenifer Baxter, head of energy and environment at the Institution of Mechanical Engineers, said the strategy was “a positive next step for the electricity sector”.
“It makes sense to encourage behavioural changes in this way. Apart from potentially saving consumers money, it also allows us to make better use of our resources.
She added: “Continued development across the energy system from multiple renewable and low emissions technologies remains vital to making the best use of our limited resources and meeting our long term emissions targets.”
Shadow business secretary Rebecca Long-Bailey claimed the announcement was a “damp squib”.
“The Government’s promise of investment in battery technology is simply a re-announcement of funding promised back in April as part of the Industrial Strategy Challenge Fund, and their record of supporting emerging green industries is abysmal,” she said.
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