Long duration electricity storage
Includes consultations, guidance and policy on long duration energy storage.
Long duration electricity storage (LDES) means storing electricity when renewable sources generate more electricity than we need to meet capacity, or trading prices are low. The electricity is then available for consumers to use when demand is high or when prices rise.
We are developing the licence that companies will need to work in long duration electricity storage.
Incentives for LDES projects
We set a minimum and a maximum for how much a company can earn from an LDES project using a financial system called cap and floor.
Under the cap and floor model:
- when revenues fall below a set minimum (the floor), consumers top up the difference through a charge on energy bills
- when revenues are above a set maximum (the cap), this extra money goes back to consumers through reductions in network charges
This model encourages investment by guaranteeing revenues that can offset the high upfront costs and market uncertainty for LDES projects.
Contact us
For more information on long duration electricity storage or the cap and floor regime, email LDES@ofgem.gov.uk.
Long duration electricity storage publications
Includes licensing guidance, policy, news and insights.