To support the next phase of clean power deployment, the UK government and Ofgem introduced a cap-and-floor revenue model for LDES in April 2025. This mechanism guarantees a minimum return to de-risk long-payback projects while capping excess profits to protect consumers. The goal is clear: without commercial certainty, critical storage assets needed to balance a renewables-heavy grid would remain underdeveloped.

The first application window targets projects with at least 8 hours of storage duration. By prioritising longer-duration assets, the government aims to seed an early pipeline of commercially viable projects, demonstrate bankability, and establish the investment frameworks needed to scale. This forms part of the government’s ambition to secure 4–6GW of LDES by 2030, directly supporting the 2030 Clean Power Action Plan.

The system-level benefits are compelling: government analysis shows that deploying 20GW of LDES by 2050 could save the UK as much as £24 bn between 2030 and 2050.

Solar Energy UK estimates that meeting the UK’s utility-scale solar and battery storage targets by 2035 will require £66.3 bn in investment—£42.7 bn for solar and £23.7 bn for storage. Separately, Rystad Energy projects that utility-scale battery systems alone could attract up to $20 bn in investment by 2030.

Meanwhile, NESO modelling recommends adding 2.7–7.7GW of new storage capacity by 2035, roughly double the UK’s existing pumped hydro fleet in Scotland and Wales.

Positioned alongside offshore wind and solar expansion, LDES is now viewed as a critical backbone of grid stability, ensuring renewable energy can be stored and dispatched reliably to meet net zero.