Ofgem gives green light to LDES projects

UK energy regulator Ofgem has delivered a major boost to the development of the nation’s long-duration electricity storage (LDES) capabilities, with the announcement that it will advance ​16 projects[i].

A ‘Minded-to-Decision’ list has been released following by the regulator following a rigorous eligibility assessment process, with Ofgem setting out which projects have been provisionally selected to receive support under the LDES cap-and-floor scheme. The scheme will provide developers with a guaranteed minimum revenue or ‘floor’, while also setting a revenue ceiling above which projects will return money to consumers if earnings exceed what is considered a fair rate of return on invested capital. Plans to introduce a LDES investment support scheme were previously announced by the UK government back in October 2024.

What is LDES?

Long-Duration Electricity Storage (LDES) refers to energy storage systems that can store and release electricity for extended periods, defined as eight hours or more. These systems help balance electricity supply and demand, especially when integrating renewable energy sources like wind and solar, which can be intermittent. There are several benefits associated with LDES, these include:  

• Ability to provide additional storage for cheap renewable energy lowering the overall cost of electricity for consumers.
• Power capacity can be switched on and off, making the grid more flexible.
• Avoids waste- for example when renewables must be curtailed due to excess supply or congestion on the grid, likewise it reduces constraint payments to windfarm operators. 
• 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. 
• Reduces dependence on fossil fuel imports.

LDES encompasses a range of technologies; ZCA previously explored how examples such as water batteries and sand batteries could ensure a stable renewables-based power system[ii]. Other forms of LDES, including liquid air energy storage (LAES), compressed air energy storage (CAES), Li-Lon, and flow batteries, are also being developed. 

Ofgem’s provisional portfolio of 16 projects includes a mix of LDES technologies including pumped storage hydro, lithium-ion batteries, compressed air energy storage and vanadium redox flow batteries. The regulator 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. Applicants were then asked to submit more detailed bids for final assessment, with the outcome of this assessment then informing Ofgem’s minded-to list.    

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, making the technology an already crucial component of the electricity system.

Akshay Kaul, Director General for Infrastructure at Ofgem, commented: “Ofgem is creating the right infrastructure for renewable energy to thrive and improve our energy security and reduce reliance on global gas markets.”[iii] Adding that “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.”[iv]

References

[i] Ofgem boosts long duration storage to secure more homegrown energy for customers | Ofgem

[ii] The Beginning of the End for Age Old Storage Problem for Renewable Energy?

[iii] Ofgem boosts long duration storage to secure more homegrown energy for customers | Ofgem

[iv] Ibid

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