UK Ofgem Selects 16 Projects for Landmark LDES Cap and Floor Scheme

UK Ofgem Selects 16 Projects for Landmark LDES Cap and Floor Scheme

The UK's energy regulatory body, Ofgem, has taken a monumental step in supporting long-duration energy storage (LDES) by provisionally selecting 16 projects for its pioneering Cap and Floor Scheme. Announced on June 26, 2026, the selection encompasses a total of 7.6 GW of power and 136.9 GWh of capacity, all requiring a minimum 8-hour discharge duration.

Diverse Technology Mix

The selected portfolio showcases a diverse mix of storage technologies. It includes 11 lithium-ion battery systems with discharge durations of up to 18 hours, such as the 400 MW Field New Deer and 200 MW Field Rigifa projects. Additionally, the scheme supports 3 pumped-storage hydro plants, including the massive 1,440 MW Coire Glas project with a 32-hour duration, 1 compressed-air energy storage project with a 30-hour duration, and 1 flow battery project.

Cap and Floor Mechanism Explained

The LDES Cap and Floor Scheme is designed to de-risk investments in long-duration assets. It utilizes a revenue corridor model to provide financial stability. If project revenues fall below the established floor, consumers pay the difference. Conversely, if revenues exceed the cap, operators share the excess income with consumers.

To qualify, mature technologies like lithium-ion and pumped hydro must meet a minimum capacity of 100 MW, while less mature technologies require a minimum of 50 MW.

This revenue corridor model provides the long-term revenue certainty needed to unlock billions in private investment for critical grid infrastructure.

By backing a wide array of technologies and durations, Ofgem's scheme is set to accelerate the deployment of LDES, ensuring the UK grid remains resilient as it transitions to a low-carbon power system.

This article was assisted by AI analysis. Please refer to the original source for official information.