London, April 2025 — Ofgem has officially opened the application window for its new cap and floor support scheme, a move set to unlock billions of pounds in private investment for Long Duration Electricity Storage (LDES) projects across Great Britain. This marks the first major government-backed effort in over four decades to scale up long-duration energy storage infrastructure in the UK.
Key Points for Developers and Investors:
- Application window now open: Developers must submit intent to apply by 22 April 2025, with final applications due by 9 June 2025.
- Project commissioning targets: Projects must aim to be operational by 2030 or 2033 to align with the UK’s Clean Power 2030 target.
- First approvals expected: Ofgem aims to select initial projects by Q2 2026.
- Eligible capacity range: The first application window targets between 2.7 GW and 7.7 GW of LDES capacity, based on NESO’s Future Energy Scenarios.
Scheme Overview:
The cap and floor regime guarantees a minimum level of revenue (the “floor”) to improve investor confidence, while capping excessive profits to protect consumers. If project revenues fall below the floor, operators receive top-up payments; if they exceed the cap, the surplus is returned to customers.
To qualify, projects must offer a minimum of 8 hours of continuous discharge capacity, ensuring the scheme supports genuinely long-duration technologies. Both mature and emerging technologies are eligible, including:
- Pumped hydro energy storage (PHES)
- Lithium-ion systems with long-duration capability
- Flow batteries
- Compressed air and liquid air energy storage
Projects will be assessed in two tracks:
- Stream One: For large-scale, high-technology-readiness projects
- Stream Two: For smaller or earlier-stage technologies
Impact on the Energy Sector:
This initiative supports the UK’s net zero pathway by enabling more efficient integration of renewables like wind and solar, reducing reliance on fossil fuels and cutting electricity costs for consumers.
According to government analysis, achieving 20 GW of LDES capacity by 2050 could save the UK power system up to £24 billion between 2030 and 2050.
The scheme also complements broader government efforts, including faster grid connection reforms and the rollout of undersea cables to connect offshore wind to the grid.
Industry Response:
Energy leaders have praised the scheme as a long-overdue catalyst for storage development. Kate Gilmartin, CEO of the British Hydropower Association, called it a “historic moment” for the sector, noting over 10 GW and 200 GWh of shovel-ready projects are prepared to move forward. RenewableUK’s Yonna Vitanova also highlighted the critical role of long-duration storage in delivering affordable, clean electricity.
🔗 Application Entry Portal:
Interested developers must notify Ofgem of their intention to apply by emailing [email protected] with the subject line:
“LDES SCHEME APPLICATION: [Project Name]” by 22 April 2025.
Full details and application guidelines are available here:
👉 Ofgem LDES Scheme Application Page
