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ARTICLE · 14 JANUARY 2025

LDES Cap And Floor: Ofgem's Proposals

Gowling WLG
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Ofgem's consultation on the cap and floor scheme for long-duration electricity storage outlines eligibility, project assessment, and cost-management criteria. Key priorities include readiness by 2030, mitigating gaming risks, and ensuring efficiency through performance incentives and penalties.

United KingdomEnergy and Natural Resources
Russell Evans
Russell Evans
James Stanier
James Stanier
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The government originally announced its intentions in October 2024 to implement a cap and floor scheme for long duration electricity storage (LDES) to incentivise investment which was reconfirmed in the government's Clean Power 2030 Action Plan. Ofgem has now published a consultation on its proposals with more detail of how the cap and floor scheme might work. We have set out some of the key updates below.

LDES Programme: how will it work?

The cap and floor scheme will open in "windows". Projects for Window 1 may submit their applications for a delivery date by the end of 2030 or by the end of 2033. Unsuccessful applicants or projects with completion dates beyond the end of 2033 will need to apply in later windows. Ofgem has published a timeline with Window 1 opening and guidance will be published in Q2 2025.

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