A partnership between Somerset waste management firm Viridor and Highview Power Storage has been awarded more than £8 million to develop innovation in storing energy.

The partnership has won a contract as part of the Department of Energy and Climate Change’s innovation competition to support energy storage technology research and development.

Taunton-based Viridor will now work with London-based Highview to build and operate an energy storage demonstration project at Viridor’s landfill site at Canterbury.

It comes after a difficult few years for Viridor which has seen revenue levels following a global slump in recyclate prices. But an interim management statement released last week by Viridor’s parent company, Pennon, said that the firm was going through a transitional period.

Pennon said Viridor was making good progress with its Energy from Waste activity.

It said that Viridor’s performance is in line with expectations with Energy from Waste schemes at Runcorn and Exeter due to become operational before the end of March and further projects under way at Cardiff, Glasgow, Peterborough, Ardley and South London.

Announcing the new contract Energy and Climate Change Minister Greg Barker said: “Storing energy will become increasingly important in the move towards a low carbon economy, and has the potential to save the energy system over £4 billion by 2050.

“Energy storage systems are potentially revolutionary technologies – just imagine how much the energy system will change if we’re able to manage supply and demand better by storing energy cost-effectively, not to mention the benefits for British research and manufacturing industries.”

Viridor’s landfill energy director Ian Morrish said: “We are pleased to have secured funding for this important project. With ever growing pressure on natural resources, it is essential that we develop innovative and sustainable methods to generate and store energy not only to cut down our carbon footprint but to ensure long-term energy security.

“Innovation has been at the heart of successful businesses in Britain and it is great news that the government recognises and supports its development.”

The two companies will use the funding to develop technology to store air in a liquid format, which can then be used to supply electricity at times of high demand. The technology will be connected to the National Grid, and will be used to test the balancing of supply and demand using stored energy.

The plant will also convert waste heat to power using heat from the on-site landfill gas engines. The project is scheduled to be operational by mid-2015.