In January, the Department for Business, Energy and Industrial Strategy (BEIS) included the proposal in a consultation on the treatment of energy storage projects within the planning system.
However, the department this week launched a new consultation which would remove the cap completely - other than for pumped hydro schemes.
The new consultation said the original survey responses "disagreed with retaining the 50MW NSIP capacity threshold for standalone electricity storage, citing this as a significant barrier to the deployment of storage projects above this threshold".
It said: "Respondents provided evidence which showed clustering of projects just below the 50MW threshold, as well as details of specific projects which had either been deliberately capped at 49.9MW or split into multiple 49.9MW projects in order to avoid the NSIP regime".
Speaking at the time of the original consultation, Gareth Phillips, partner at law firm Pinsent Masons, said: "If the 50MW threshold remains, we can reasonably expect energy storage projects to be capped below 50MW to avoid the delay, costs and resource implications of the NSIP regime."
Under the new proposals, all electricity storage applications, except for pumped hydro, would be excluded from the NSIP regime in England and Wales, meaning that they would be decided by local authorities.
The new proposals also look to exclude composite projects – where electricity storage other than hydro is deployed alongside other forms of electricity generation – from the NSIP regime.
The consultation said "the capacity of the storage facility would not form part of the overall capacity of the generating station against which NSIP capacity thresholds are measured".
Earlier this month, the energy secretary Andrea Leadsom granted development consent to proposals to replace two coal-fired power units at the Drax Power Station in North Yorkshire with gas-fired units, overruling a recommendation from the Planning Inspectorate (PINS) to withhold permission.
The development consent order (DCO) application included 200MW of battery storage.