The Energy Transition | Government Backs Cap & Floor Support For Long Duration Storage Projects

Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero

This week we look at: recent government announcements affecting the long duration energy storage sector, carbon capture and hydrogen sectors; Ofgem's review of capacity market rules; and the world's longest undersea cable linking the UK and Denmark.

Government backs cap & floor support for long duration storage projects

The government has launched a consultation on its proposal to develop a cap and floor mechanism designed to overcome the investment barriers it has identified in the long duration electricity storage (LDES) sector.

The consultation states that the use of a cap and floor mechanism has already boosted growth in the number of interconnector projects in the UK. The mechanism guarantees investors a minimum level of revenue to cover construction and debt costs (the floor). If the project's revenue does not reach the floor it is