House of Commons · Written Ministerial Statement
Government response to the consultation on long-duration electricity storage
10 October 2024 · Department for Energy Security and Net Zero
Proposed by Michael Shanks Lab Rutherglen
Summarised by AI from the official record, so it can contain mistakes.
At a glance
Key points
- Government will introduce a cap and floor regime to support investment in Long Duration Electricity Storage assets.
- Revenue protection for investors will be provided through a low-level revenue floor and regulated revenues via a cap.
- Ofgem will act as the delivery body to facilitate the implementation of the new regime.
Issue summary
The minister announces the government's decision to introduce a cap and floor regime to support investment in Long Duration Electricity Storage (LDES) assets.
Action requested
The government will implement a cap and floor mechanism for LDES, provide revenue protection for investors through a low-level revenue floor, regulate revenues via a cap, and engage Ofgem as the delivery body to facilitate implementation. Technical documents and decision-making processes are expected in winter 2024 with applications from developers anticipated in 2025.
Key facts
- LDES technologies include Pumped Storage Hydropower (PSH) and Liquid Air Energy Storage (LAES).
- Analysis shows that 20GW of LDES could result in £24bn savings by 2050, representing a 3.5% reduction in total system costs.
- A consultation was published in January 2024 exploring an investment mechanism for LDES.
- Ofgem will expand its role to regulate and deliver the cap and floor mechanism for LDES projects.