In the latest edition of our Innovating to Net Zero Insight series, Alex Hunter, CEO of Sherwood Power, explains why we need to quickly start building systems that work where power is needed.

Here at Sherwood Power we’re “Rewiring the Grid from the Ground Up” and we’re challenging the old way of thinking about electricity. If you run a business, you know the UK energy system feels like a high-stakes rollercoaster. Prices swing wildly, securing reliable power or more power to expand, is a headache, and the pressure to go green is constant.

We believe the key to a stable, low-carbon future isn’t just building massive faraway power plants; it’s by rewiring the grid from the ground up, right at the point of consumption.

Our innovation, the ‘Free Air Battery (FAB) Electrical Energy Storage’ system, is an industrial scale, long-duration solution that’s taking the pressure off the National Grid while slashing energy costs for big energy users like manufacturers and cold storage logistics facilities.

Why power in place matters for a Net Zero future

We’ve grown up believing that electricity simply arrives when we need it, second by second. Switch on the lights, plug in the car, heat the home, as if the power grid is an endless tap. But the truth is, that system was never designed for the future we’re building.

The original grid is centralised with massive hydrocarbon power stations pushing energy down the lines. If you want more power throw more stored coal or gas on the fire, make more steam and electricity. Simple. If you have stable demand.

But not if you’re running millions of electric vehicles, electrifying every heating system and powering industry 24/7. Expecting the old grid to cope with all of that is like trying to fill a swimming pool through a drinking straw when sometimes there isn’t any water to push through it.

The hydrocarbon analogy: Rethinking the system

Think about the hydrocarbon system. You don’t have a massive oil refinery at your house nor your own petrol pump. You go to a petrol station because it makes sense to store the fuel energy (kWh) close to where it’s needed, not at every home. Electricity should work the same way. It’s a shared resource that needs intelligent local storage and generation, not endless transmission from faraway power stations.

When you set up a new factory and need compressed air, would you put your compressor (generator) 100 miles away? Of course not, you’d put it just outside the building. Yet that’s exactly how we’ve treated power generation for decades. Big stations, far from demand, pumping electricity through fragile networks that buckle under stress.

The hydrocarbon system has storage embedded everywhere: in tankers, refineries, depots, forecourts. It’s always near demand, always ready to respond. Compare that to global electricity storage, which is orders of magnitude smaller than the energy currently held in ready-to-use hydrocarbons. We need to bridge that gap with distributed storage.

FAB: Your site’s energy game changer

The FAB is an industrial-scale, long-duration energy storage (LDES) solution that replaces the need for continuous remote supply with local, stored, firm power.

How we reduce costs and build resilience

By installing the FAB system co-located at the point of consumption, we achieve many system benefits. These include:

• Making renewables consistent: a friend of mine went sailing from Portugal to Gibraltar. They had to be at the destination for a specific time to hand over the boat. There was no wind for seven days so they had to fire up the diesel engines and burn through 600 litres of fuel. It’s the same with our power system when renewables falter, we fire up the gas turbines. The FAB solves this by capturing renewable power when it’s cheap and plentiful, and storing it (as compressed air and heat) for when it’s not. This long-duration, zero-emission storage is the missing piece, it is the kWh fuel tank.
• Eliminating transmission and distribution losses: We bypass the need to push the stored energy back through the high-voltage transmission network and the distribution networks. This avoids the inherent 5-10% losses in energy that central generation and centralised storage systems incur.

The FAB technology offers long-duration storage (up to 100 MW for between one and 12 hours) with a high round-trip efficiency of over 80% and a 30-year operational life. This offers a highly sustainable and fully recyclable alternative to traditional battery technologies.

Solving the peak gap issue

The peak gap refers to the shortfall between electricity supply and demand during the most stressed periods such as winter evenings. We absorb excess (waste) electricity at low cost and give it back when the system is under strain.

Our innovation directly helps to reduce peak demand on the National Grid by displacing the demand requirement from the national system during those crucial hours.

The two gaps we cover

• The peak energy gap: The FAB stores cheap, off-peak electricity and releases it during the evening peak, between 4pm and 5.30pm. For the host site, this means zero draw from the National Grid at that time, directly reducing the measured national peak demand and immediately relieving pressure on local distribution networks.
• The peak duration gap: With storage durations of up to ten hours or more, the FAB is a LDES asset. As we hit the 2030s and renewables dominate, the challenge shifts to covering multi-day shortfalls. Our systems will be a fundamental building block in ensuring the long-term, stable supply needed for Net Zero, while reducing the overall demand capacity.

Barriers and enabling conditions

For this vision of local generation and distributed storage to become a reality, we need supportive policies.

Barriers to adoption

• Regulatory classification and charging: The biggest hurdle is the ambiguous regulatory treatment of storage, which has historically led to ‘double charging’ on network fees, which is a massive disincentive for investment.
• Grid connection uncertainty: The lengthy and expensive connection studies triggered by even minimal potential export to the grid undermine the business case for embedded storage.
• There is no price signal from the UK market to incentivise storage. Whereas some other countries do have this in place.

What we need to succeed

• Policy support for LDES: Targeted, long-term support for LDES technologies (like Contracts for Difference) to drive down costs through deployment volume.
• A market structure that allows infrastructure constraints on the distribution network to be managed fairly and cost effectively, and be accessible to all grid users from large industrial sites to individual households via their suppliers or aggregators. This would empower them to actively participate in managing the grid by responding to price fluctuations that reflect real-time local conditions. A successful outcome would be the emergence of a vibrant market for flexibility, where demand side response and decentralised assets regularly compete with traditional generation to provide services like constraint management.
• Standardised connection process: Distribution Network Operators (DNOs) need a fast-track, low-cost connection process for storage systems that are primarily behind-the-meter.
• Business model innovation: We are developing an electricity-as-a-service (EaaS) model where Sherwood Power owns and operates the FAB on a customer’s site. We would then sell them cheaper energy via a power purchase agreement. This removes the upfront capital risk for the end user.

If we want a truly sustainable energy future, we need to act now. We need to stop thinking in terms of central control and start building systems that work where the power is needed. That’s the only way to close the peak energy gap and make renewable energy reliable, affordable and available to all.

Energy Systems Catapult’s flagship Innovating to Net Zero 2026 report and event in February will highlight the innovation priorities needed to support a flexible energy system which is affordable and fit enough to thrive in the race to Net Zero.