Highview Power Storage plans to develop a commercial facility which uses liquid air to store renewable energy after a pilot project was successful, the firm told Reuters Wednesday.

One of the problems facing wind power development is how to store surplus energy when the wind is strong and release it when the weather is calm.

Highview recently completed tests at a 350 kilowatt pilot plant near London and connected it to the National Grid, and says it is confident its technology works and is planning a larger scale plant.

We are currently in discussions to build a 7-10 megawatt unit. Our aim is for this to be operational in two years, said Toby Peters, the firm's co-founder and chief operating officer.

Liquid air energy storage takes electricity from the grid at peak times, such as on windy days, and uses it to cool air until it liquefies at minus 196 degrees Celsius.

The liquid air can then be stored cheaply and safely until it is needed and exposed to normal temperatures. Then the liquid immediately turns back into gas, expanding by 700 times, and can be used to turn a turbine and feed electricity back to the grid.

The pilot plant was part funded by a 1.1 million pound grant from the government.

The UK's National Grid estimates it needs another 4.5 gigawatts of additional operating reserve by 2020 to balance the grid as more and more renewable power is deployed.

Most current energy storage solutions are inadequate, forcing wind turbines to be switched off when there are extremely high winds.

National Grid paid 12.8 million pounds to wind farm operators last year to compensate them for switching off their turbines when the grid was overloaded during stormy days.

Today we are seeing urgent demand for large-scale energy storage which can be deployed where pumped hydro is not viable, said Peters.

With the right support, energy storage could not just help the transition to a green grid but also generate major revenue and jobs for the UK economy as well.

(Editing by James Jukwey)