IN Brief:
- Ofgem has published its minded-to decision list for the first long-duration electricity storage cap-and-floor window.
- Sixteen projects have been provisionally selected across pumped hydro, compressed air, lithium-ion, and vanadium redox flow battery technologies.
- The consultation remains open until 7 August, with final determinations expected later in 2026.
Ofgem has published its minded-to decision list for the first long-duration electricity storage cap-and-floor application window, advancing 16 projects across a mix of storage technologies.
The provisionally selected portfolio includes pumped storage hydro, compressed air energy storage, lithium-ion batteries, and vanadium redox flow batteries. Projects are located across Scotland and England, with one proposed vanadium redox flow battery project in north Wales.
Long-duration electricity storage is defined as storage capable of releasing electricity for eight hours or more. Ofgem expects the selected projects to help reduce system costs by easing pressure on transmission and distribution networks, reducing constraint-management requirements, and supporting more efficient use of renewable generation.
The consultation on the minded-to decisions remains open until 7 August, with final determinations expected later in 2026. Projects that were not selected may be able to participate in later windows, subject to further design and consultation, or proceed as merchant projects without cap-and-floor support.
The cap-and-floor model provides a regulated revenue framework. The floor creates a minimum revenue level if market revenues fall below a defined threshold, while the cap sets an upper revenue limit, with returns above that level shared for consumer benefit. The model is already familiar in electricity interconnector investment.
The first application window opened in April 2025. Ofgem screened projects for eligibility before asking qualifying applicants to submit more detailed bids for assessment. The minded-to list now gives developers, investors, equipment suppliers, and construction partners a clearer view of which projects are expected to progress toward the final decision stage.
Britain’s existing long-duration storage capacity remains concentrated in pumped storage hydro, with 2.8GW across four operational facilities in Scotland and Wales. Those assets have long provided valuable flexibility, but the electricity system now faces a larger and more varied balancing task as renewable generation, interconnectors, storage, demand response, EV charging, electrified heat, and data-centre demand reshape daily and seasonal operation.
Short-duration battery storage has grown quickly and has established a strong role in frequency response, arbitrage, and near-term balancing. Longer-duration requirements are different. Extended low-wind periods, winter evening ramps, cloudy conditions, network congestion, and wider adequacy concerns require assets that can shift energy across more than one or two hours.
System conditions are already showing a wider seasonal risk profile. A summer electricity margin notice from NESO demonstrated that tight operating conditions can emerge outside the historic winter peak-risk period. Long-duration storage can support capacity adequacy during those conditions, provided assets are charged, available, and connected where their output can be used effectively.
The selected portfolio’s technology mix gives the programme a broader technical base. Pumped hydro can provide large-scale capacity and long asset life, but it depends on suitable geography, major civil works, and long development periods. Compressed air storage has different siting and engineering requirements. Flow batteries offer long-duration operation with different degradation characteristics, while lithium-ion systems bring established supply chains and fast response but face questions around duration, degradation, and revenue optimisation at larger discharge periods.
Location will heavily influence system value. Storage connected in constrained renewable regions can absorb generation that would otherwise be curtailed and release power when transfer capacity or demand conditions improve. Storage connected without regard to network constraints may still earn market revenue, but it will not necessarily reduce the highest system costs.
The UK storage market is already scaling beyond short-duration assets. A 2GWh Scottish battery project demonstrates the scale now entering development, while the LDES cap-and-floor process creates a regulated route for assets with larger capital requirements and longer payback horizons.
Delivery risk now becomes central. Long-duration projects can involve reservoirs, tunnels, caverns, compressors, batteries, power conversion systems, grid connections, civil engineering, environmental consent, transformers, switchgear, and extended commissioning. The minded-to list is therefore an infrastructure pipeline, not a final operational capacity figure.
The consultation and final determinations will decide which projects receive formal support, but the wider test will be whether selected schemes can reach operation on credible timelines. Britain’s clean-power system needs storage that can provide capacity, flexibility, congestion relief, and renewable shifting. Ofgem’s first LDES selection window begins to define which assets may be asked to deliver that role.
