The University of St Andrews-led project has been granted the funding by the Faraday Institution.
The £12m project, Nexgenna, will work on creating a sodium ion battery with high performance, low cost and a long cycle life. The battery could eventually be commercialised.
The relatively low cost of sodium ion batteries makes them potentially attractive as a next generation technology, particularly for static energy storage applications where large batteries are needed, and for low-cost vehicles.
Such batteries could allow electric trains to run on non-electrified lines making currently non-economical routes - for example rural services in the Scottish Highlands - commercially viable.
The technology could also allow effective storage of intermittent renewable energy sources such as wind turbines and allow electric cars to travel further before needing to be recharged.
The four-year research project will be led by Professor John Irvine and Dr Robert Armstrong of the University of St Andrews, with contributions from Lancaster University, the University of Cambridge, University College London, the University of Sheffield and the Science & Technology Facilities Council.
Irvine said: “This is a very exciting opportunity to develop a new strand of battery technology that the UK is uniquely well placed to lead the world through industry and academia working together.”
Armstrong added: “We have assembled a very strong team and look forward to delivering world class research enabling the UK to establish itself at the forefront of this developing technology.”