Ofgem boosts long duration storage to secure more homegrown energy for customers

Ofgem has today (Friday 26 June 2026) marked a significant step forward in the development of long duration electricity storage (LDES) in Great Britain, moving the programme from eligibility assessment into the next phase of project selection.

Following a rigorous eligibility assessment process, a Minded‑to-Decision list has been published, with Ofgem setting out which projects have been provisionally selected to receive support under the LDES cap and floor scheme.

Ofgem has identified 16 projects creating an LDES portfolio which is anticipated to reduce costs by alleviating pressure on transmission and distribution networks and minimising the need for costly investment in new infrastructure or constraint management. 

The selected projects comprise four technologies – pumped storage hydro (PSH), compressed air energy storage (CAES), lithium-ion batteries and vanadium redox flow batteries (VRFB) – and are geographically spread across Scotland and England, with one proposed VRFB project selected in north Wales. 

LDES refers to energy storage systems that can store and release electricity for long periods, defined as eight hours or more. These systems help balance the supply and demand of electricity, especially when using renewable energy sources like wind and solar, which can be unpredictable.   

Ofgem will now gather stakeholder views on the proposed decisions to ensure they deliver the best outcomes and value for money for business and consumers.

Akshay Kaul, Director General for Infrastructure at Ofgem, said: “Ofgem is creating the right infrastructure for renewable energy to thrive and improve our energy security and reduce reliance on global gas markets. 

“It’s fantastic to see such a wide range of technologies coming forward.  This takes us a step closer towards the long-duration energy storage we need in a clean power system to maintain secure supply during periods of cold, hot, still or cloudy weather when solar or wind power output may be low.”

Energy Minister, Michael Shanks, said: “Forty years after the country's last pumped storage facility, this government is getting Britain building again.

“The lesson from the conflict in Iran is clear: Britain cannot afford to remain at the mercy of volatile fossil fuel markets and leave families exposed to the next price shock. 

“That is why we are further and faster in delivering the clean power mission by rolling out a new generation of pumped hydro storage and state-of-the-art batteries - making more of the clean, homegrown power we already produce, cutting waste, lowering bills and strengthening our energy security.”

The consultation will remain open until August 7, with final determinations expected later this year. Unsuccessful projects may have the opportunity to participate in further selection windows – the design of which Ofgem expect to consult upon later this year – or proceed as merchant projects.

Today’s announcement represents a key milestone in the delivery of a framework designed to unlock investment in large‑scale, LDES technologies that will play a critical role in the transition to a low‑carbon electricity system.

LDES will play a key part in an increasingly intermittent generation system, providing consumers with the electricity they need even when the wind isn’t blowing or the sun isn’t shining.

The publication of the Minded-to-Decision list gives developers and investors greater clarity on the projects expected to receive support, helping to build confidence across the sector and supply chain.

Ofgem is now seeking views from industry participants, consumer groups and other stakeholders on the Minded‑to Decisions. Feedback will inform the regulator’s final determination on which projects will be selected to receive cap and floor support.

View Long duration electricity storage window 1: minded-to decisions.

Notes to editors  

What is LDES?

Long-Duration Electricity Storage (LDES) refers to energy storage systems that can store and release electricity for long periods, defined as eight hours or more. These systems help balance the supply and demand of electricity, especially when using renewable energy sources like wind and solar, which can be unpredictable.   

LDES has multiple benefits:  

• It allows a greater amount of cheap renewable power to be integrated into the electricity system, lowering the overall cost of electricity for consumers
• Provides power capacity that can be switched on and off, making the grid more flexible
• It avoids the waste when renewables have to be curtailed due to excess supply or congestion on the grid – resulting in constraint payments to windfarm operators 
• It provides electricity system services to the grid, such as the ability to restart after power failures or stability services to keep the lights on in real time 
• If the UK establishes a strong domestic energy storage industry, it can export storage capacity and technologies
• Storage would reduce the UK’s dependence on costly, polluting and uncertain fossil fuel imports

Great Britain currently has 2.8 gigawatts (GW) of LDES across four Pumped Storage Hydro (PSH) facilities in Scotland and Wales. These operate like natural batteries, with electricity stored by pumping water up a mountain to be released when required and are already crucial to the electricity system. Other forms of LDES – such as liquid air energy storage (LAES), compressed air energy storage (CAES), Li-Lon and flow batteries – are also being developed.    

In October 2024, the government decided to introduce an LDES investment support scheme to be delivered by Ofgem. The cap and floor investment support scheme was strongly supported by the consultation responses and is modelled upon the approach already used to successfully deliver electricity interconnection.    

Ofgem opened the first application window in April 2025, screening projects for eligibility against a clear set of published criteria to ensure a fair and transparent process for all.     

The regulator then asked the projects meeting the eligibility criteria to submit more detailed bids for final assessment. The result of this final assessment has informed Ofgem’s minded-to list.    

Cap and Floor is a regulatory scheme to be used to support these projects:  

• Cap: The cap is a quid pro quo arrangement that sets a revenue ceiling, above which projects pay money to consumers if they end up making more than is considered a fair rate of return on invested capital. 
• Floor: This is the minimum revenue provided to the project. If the project's revenue falls below this floor, consumers pay the LDES operator the difference up to the floor level.   

Being awarded a cap and floor means the project is underwritten to provide financial protection on the downside. It ensures that the project can earn a minimum income to recover their investment. If revenue is high, consumers are rewarded with the excess revenue being shared with consumers.