Preface
The UK energy regulator, Ofgem, has provisionally selected 16 Long Duration Energy Storage projects for support. These projects will be transformative because they are designed to operate for much longer periods than most existing electricity storage schemes, so will be able to store much more electricity. However, Ofgem could have been even more ambitious and aimed to massively reduce reliance on expensive and too slow nuclear technology as well as offering support to new innovative and rapidly developing storage technologies. The technology is developing so fast around the globe that the UK’s slow decision-making process means we could miss out on an incredible opportunity.
Introduction
The UK energy regulator, Ofgem, has provisionally selected 16 Long Duration Energy Storage projects for support, through its cap-and-floor scheme, chosen from a shortlist of 77 projects announced in September 2025.1 In total, 7.6GW of long-duration energy storage capacity, with a range of 8 to 32-hour durations, could get backing, subject to a consultation which closes on 7th August 2026. Ofgem says it plans to announce its final awards in the Autumn. If all 16 projects go ahead, the total electricity which can be stored will jump from 41.9GWh to 178.8GWh. This could be transformative according to Chris Goodall, author of “Possible Ways to Net Zero”.2
The 7.6GW storage capacity is only just over half of existing storage capacity but the crucial difference is that these new projects are designed to operate for much longer, so the total energy they will be able to deliver is over three times as much as all the existing grid storage sites.3
| Mid 2026 GB storage | New Ofgem longer duration sites | ||||
|---|---|---|---|---|---|
| GW | GWh | GW | GWh | ||
| Battery parks | 10 | 18 | 3.6 | 47.1 | |
| Pumped hydro | 2.8 | 23.9 | 3.9 | 87.8 | |
| Other | 0.1 | 2.0 | |||
| Total | 12.8 | 41.9 | 7.6 | 136.9 |
Although the 7.6GW capacity chosen is at the very top end of Ofgem’s guide range of 2.7-7.7GW for this first window, it could have been more ambitious, both in terms of capacity and in the range of different technologies supported. The National Energy System Operator’s targets for Long Duration Energy Storage (NESO)4 are chosen on the assumption that the Government makes substantial progress on its 24GW nuclear generation target for 2050.
Ofgem says the 16 projects represent an ‘appropriate mix of duration, technology and locational distribution’.5 But lithium-ion battery energy storage systems (BESS) and pumped storage hydro (PSH) have taken the lion’s share of the capacity, leaving little space for up-and-coming, innovative technologies, particularly those which do not rely on imports of lithium and those that have the potential to be much cheaper. Since October 2024, when the cap-and-floor scheme was first announced with the intention to de-risk investment in Long Duration Energy Storage, many novel and innovative technologies have been developed around the world. Given that only two of the 16 projects will be using relatively novel technology, questions will be asked about how the Government intends to support novel storage technologies, if at all.
Ofgem says the 16 projects represent an ‘appropriate mix of duration, technology and locational distribution’. But lithium-ion battery energy storage systems (BESS) and pumped storage hydro (PSH) have taken the lion’s share of the capacity.
As the market for storage technology evolves, investors are asking “what storage duration is most optimal?” Lithium-ion batteries currently supply around 90% of global energy storage capacity, mainly in short-duration, two- to four-hour applications.6 Two of the Lithium-ion battery projects on Ofgem’s list of 16 projects can operate for over 18 hours and new projects around the globe are increasingly shifting towards longer duration, even without the kind of support offered by the UK’s proposed cap and floor scheme. As renewable energy capacity increases, the market is likely to see sustained periods of both high and low prices. Longer duration storage schemes are better able to capture value across these extended price periods.7
1. Do current plans over- or under-supply storage capacity?
The National Energy System Operator (NESO) reported in 2024 that there was already a queue of 49.8GW of batteries (including existing capacity) waiting to go-ahead. This is greater than the maximum required installed capacity for short-duration storage under any scenario at 2050 (40.4GW).8
On the other hand, NESO estimates that 17GW of Long Duration Storage Capacity will be required by 2050.9 An underestimate according to Energy research group Aurora, which estimates that 18GW of Long Duration Electricity Storage (LDES), will be required by 2035 to effectively manage the intermittency of renewable generation.10
The table below gives the estimates from various reports of the amount of short and long duration energy storage which might be required in the UK in various years up to 2050.
| Current capacity11 | 2030 Clean Power Action Plan12 | NESO 2035 Target13 | Aurora 2035 estimate14 | NESO 2050 scenarios | |
|---|---|---|---|---|---|
| Short duration (<8hrs) | 7GW | 23-27GW | 33GW | 28GW | 31.2-40.4GW15 |
| Long duration (>8hrs) | 2.7GW | 4-6GW | 10GW | 18GW | 13.2-16.6GW16 |
So, it looks likely that we could be headed for an oversupply of short-duration storage and an under supply of long duration energy storage.
2. Storage & Nuclear Power
The UK Government claims that:
“Nuclear power plants produce ‘firm power’ that is not dependent on the weather. This complements intermittent renewables and provides reliable baseload generation to help ensure security of low-carbon electricity supply.”17
The 2024 Civil Nuclear Roadmap, which set an ambition for up to 24 Gigawatts (GW) of nuclear capacity by 2050.18 claimed that:
“There is no credible pathway to net zero nor energy security without nuclear power…”
Yet, the UK nuclear programme has been beset by cost overruns and delays. Hinkley Point C could now, potentially, be delayed until 2031.19 Sizewell C is unlikely to be on line much before 2040. With the last of the AGR reactors closing in 2030, we could be left with only Sizewell B and Hinkley Point C – about 4.4GW – for the best part of a decade. Assuming Sizewell C opens eventually nuclear capacity could still be as low as 7.6GW in 2050. And it is always possible that Sizewell C is cancelled by a future Government desperate to cut back on public expenditure and to reduce consumers’ bills. In the National Energy System Operator’s (NESO’s) three scenarios for 2050, which meet net zero, nuclear capacity ranges between around 11GW and 22GW.20 So, it is reasonable to question whether the UK is planning sufficient storage capacity for an energy system where the nuclear contribution falls well short of the 24GW target. A higher target for Long Duration Energy Storage would provide a useful contingency against failure to meet nuclear generation targets, or even a replacement for the expensive and too slow nuclear programme.
We also know from work done by renowned energy modellers at LUT University in Finland that the UK could save well over £100bn in achieving net zero by 2050, compared to the Government’s current strategy by generating all its energy requirements – not just electricity – using renewable sources.21
It is reasonable to question whether the UK is planning sufficient storage capacity for an energy system where the nuclear contribution falls well short of the 24GW target.
There has been no proper Government evaluation of the cost effectiveness of spending taxpayers’ money on the new nuclear programme compared to spending it on long duration energy storage.
3. 24/7 Renewable Power
The plunging cost of large-scale battery storage is potentially game-changing and could usher in an era of 24/7 renewable power.22 The International Renewable Energy Agency (IRENA) has confirmed the cost-competitiveness of round-the-clock renewable power through hybrid solutions of solar and wind with battery storage.23 Senior Aberdeen University Research Fellow, and Policy Brief author, Dave Toke, agrees that batteries are transforming electricity markets – and fast– making renewables-plus-batteries cheaper than gas across much of the world.24 Large grid-scale batteries have collapsed in price in the last two years, and the quality of them has remarkably improved, with considerably lower use of critical minerals, far longer battery lifetimes, and with fire hazard all but eliminated.25
Meanwhile, Australia is pioneering a revolution in home renewables and battery use, proving what is possible with the right policies. Batteries mean solar power can be stored and used when needed – countering the long-used arguments against renewables that they are unpredictable and intermittent and therefore put extra burdens on a national grid and must have an expensive backup power source. Previously, power prices would rocket in the evenings as gas-fired power – the most expensive form of energy generation on the Australian grid – was turned on to meet peak demand. But now batteries are increasingly taking over that role. This revolution is not just happening in Australia. The home battery of today is vastly superior to the home battery of a couple of years ago. Alison Reeve, the energy and climate change programme director at the Grattan Institute think tank in Melbourne, says it neatly illustrates how the energy system has been rewritten, almost overnight. Under the new model, households are producers and players in the market, not just consumers. Older forms of generation are increasingly being squeezed out. And the advent of batteries with longer durations means past criticisms of solar energy – that the sun doesn’t shine at night – is being “blown out of the water”.26
4. Renewables plus storage would be cheaper than nuclear
Renewable energy and storage costs have decreased significantly over the past decade while the cost of nuclear has increased. A study, focussed on Denmark, by Jakob Zinck Thellufsen et al. finds that investments in flexibility in the electricity supply are needed in both systems due to the constant production pattern of nuclear and the variability of renewable energy sources. However, the scenario with high nuclear implementation is €1.2 billion more expensive annually compared to a scenario only based on renewables, with all systems completely balancing supply and demand across all energy sectors in every hour.27
The advent of batteries with longer durations means past criticisms of solar energy – that the sun doesn’t shine at night – is being “blown out of the water”.
A 2023 Royal Society report ‘Large Scale Energy Storage’, 28 concluded that a portfolio of different types of storage would lower the average cost of electricity, whereas new nuclear ‘baseload’ supply would increase costs, unless the cost of nuclear is near or below the bottom of the range of projections made by the UK Government and/or the costs of storage are near the top of the range of estimates in the report.
The new International Renewable Energy Agency report confirms the cost-competitiveness of round-the-clock renewable power through hybrid solutions of solar and wind with battery storage. Solar and wind energy paired with battery storage are reliable and are already delivering cost-effective, round-the-clock electricity. Firm levelised costs of electricity (‘firm costs’) for solar plus storage range from $54 to $82 per megawatt-hour (MWh) in high-quality resource regions, compared with $70–85 per MWh for new coal in China and more than $100 per MWh for new gas globally.29
5. Longer Duration Battery Storage
Lithium-ion batteries currently supply most global energy storage capacity, mainly in short-duration, two- to four-hour applications.30 It used to be thought that scaling Lithium-ion batteries up to a storage duration of more than eight hours would not be cost effective, but longer duration storage is now economically feasible. Lithium-ion batteries can have some major disadvantages, such as the use of conflict mineral cobalt and the fire risk, but battery technology has been evolving to reduce the use of rare metals such as cobalt and nickel and reduce fire risks. Lithium ferrous phosphate (LFP) batteries, which avoid using cobalt, have been replacing lithium-ion batteries. It’s likely LFP batteries will dominate the market for EVs and stationary storage applications in the near term.31 Although Lithium is a very common element, China currently holds a dominant position in the processing of lithium chemicals – something that Europe and the US are trying to change.32
6. New Battery Technologies
There are dozens of options for energy storage besides Lithium-ion Batteries, but it is still uncertain whether they will become a disruptive alternative to lithium-ion technology. Nevertheless, we should be wary of putting all our eggs into the lithium basket. Paul Sheffield, Chief Commercial Officer at Drax, which is investing in energy storage, says current economic and market structures may favour lithium-ion-based short-term batteries, but it is only a matter of time until long-term battery technologies become more efficient and affordable, and the rate of adoption is expected to grow exponentially as a result. Recent geopolitical conflicts have reiterated the importance of a diversified, balanced energy system. Nations that adapt toward a system built on flexible generation and storage – designed to deliver reliability, affordability, and sustainability while insulating against future shocks – will have a clear advantage, both today and in years to come.33
The Chinese company, CATL, which is the largest battery producer in the world, has been making sodium-ion batteries for some time.34 Yet no sodium-ion battery projects featured in the shortlist of 77 projects announced in September 2025. Sodium-ion batteries will use common, cheaper ingredients. These are gaining a lot of attention right now because the costs are fast declining,35 and could offer significant cost-savings compared to lithium.36 As Chinese manufacturers enter mass production, the economics of grid-scale energy storage are about to shift. CATL’s sodium-ion battery costs $19/kWh at the cell level, compared to $55-60 for lithium iron phosphate.37
Morgan Stanley predicts sodium-ion batteries will take ~2 per cent market share by deployment in 2027, jumping to 20 per cent by 2030 and 37 per cent in 2035. They could unlock ~50% more energy storage demand by adding batteries to existing renewable projects which were built without storage. There’s a security angle too. Unlike lithium, cobalt and graphite, sodium salt is nearly everywhere. Switching from Lithium batteries to sodium-ion might become a security priority for countries that want to reduce critical mineral dependency and insulate themselves from geopolitical disruption.38
As Chinese manufacturers enter mass production, the economics of grid-scale energy storage are about to shift. CATL’s sodium-ion battery costs $19/kWh at the cell level, compared to $55-60 for lithium iron phosphate.
Another company which could revolutionise the battery industry is American company, Form Energy. The company uses iron-air technology – a process known as “reversible rusting”. When iron rusts it discharges electrons, swapping them for oxygen and creating an electrical current. To reverse this process and charge the battery, excess electricity is fed into the battery, forcing apart the molecules of iron oxide and releasing the oxygen. Once the units have been built, the power they generate will cost roughly $20 (£15) per kilowatt-hour, Because they are cheap and use readily available iron, air and water, rather than relying on rare-earth metals, they can be built at a far bigger scale than lithium batteries.39
7. Inter annual storage
When the longer duration sites have been completed, probably early in the 2030s, they will contain enough to provide all the electricity that Great Britain40 needs for almost four hours. There are periods, such as late April 2026, when wind speeds are low so the 178.8GWh would get used up fairly quickly, so without even more storage we wouldn’t be able to completely turn off gas turbines. That will require a third type of electricity storage that keeps energy for much longer periods of time. This could be provided by hydrogen.
The Royal Society report assumes demand for electricity in Great Britain in 2050 will be 570 TWh/year. It concludes that renewables plus hydrogen will be fully sufficient, provided there is adequate storage capacity to cope with years when wind speeds are unusually low. When wind or solar are abundant electrolysers will use the electricity to split water into oxygen and hydrogen. The hydrogen can be stored in deep caverns underneath the ground created in the middle of impermeable salt deposits. When wind and sun are in short supply the hydrogen can be converted back to electricity in a gas turbine or a fuel cell. The Royal Society report adds that adding nuclear power to the mix cannot be expected to decrease the cost of UK electricity supply.41
8. Conclusions
As I concluded in my previous Policy Brief42, a 100% renewable energy system for the UK is not only technically feasible but also offers a much cheaper path towards achieving net zero in 2050 compared to the UK Government’s pathway for net zero. The UK could provide all the energy its needs from renewable sources in conjunction with short and long duration energy storage without the need for new nuclear stations or fossil gas peaker plant.
Ofgem’s provisional selection of 16 Long Duration Energy Storage projects is a major milestone on the road to an energy system based on 100% renewables, but we will need further rounds of cap and floor allocations, a scheme to encourage further innovation and development of the rapidly developing new storage technologies, along with a plan for hydrogen storage.
Ofgem says it expects to undertake consultation on the design of future windows in 2026 and confirm its position by 2027. This would be an ideal opportunity to significantly increase the capacity of Long Duration Energy Storage as a replacement for the expensive and too slow nuclear programme, It will also provide an opportunity to widen the number and type of technology which is supported. This should be done in consultation with Great British Energy which is committed to exploring supporting more nascent Long Duration Energy Storage technologies.43
ENDNOTES
1. ‘Ofgem boosts long duration storage to secure more homegrown energy for customers’, Ofgem Press Release, 26 June 2026.
2. ‘Why the announcement about long-duration storage matters’, Carbon Commentary, 3 July 2026.
3. When referring to the capacity of storage schemes it would be better to quote both the maximum electricity flow that each site can provide in GW as well as the total amount of electricity that can be stored in GWh. By dividing the number of GWh by the maximum electricity flow we find the number of hours that the maximum discharge can be sustained. For example, the Coire Glas Pumped Hydro Storage Scheme, one of the projects on the Ofgem shortlist, is capable of discharging at 1,440MW. But it is capable of storing sufficient water to generate 46.08GWh. So it could generate at maximum flow for 32 hours. (48.08GWh divided by 1.44GW = 32 hours).
4. ‘Future Energy Scenarios: Pathways to Net Zero’, NESO, November 2025, page 140.
5. ‘UK’s Ofgem goes big on LDES cap-and-floor window 1; 18-hour lithium-ion among winners’, Energy Storage News, 26 June 2026.
6. ‘Can anything top lithium-ion’, PV Magazine, 30 March 2024.
7. ‘When do 4-hr systems win? Short vs. Long Duration Energy Storage’, Gridcog, April 2026.
8. ‘Future Energy Scenarios: Pathways to Net Zero’, NESO, November 2025, page 138.
9. ‘Future Energy Scenarios: Pathways to Net Zero’, NESO, November 2025, page 140.
10. ‘Long duration electricity storage in GB’, Aurora, February 2022.
11. ‘Great British Energy: Strategic Plan’, December 2025, page 30.
12. ‘Clean Power 2030 Action Plan’, Department for Energy Security and Net Zero, 15 April 2025.
13. ‘Great British Energy: Strategic Plan’, page 30.
14. ‘Long duration electricity storage in GB’, Aurora.
15. ‘Future Energy Scenarios: Pathways to Net Zero’, NESO page 138.
16. Ibid, page 140
17. ‘Consultation on financial support for nuclear lifetime extensions’, Department for Energy Security and Net Zero, 5 March 2026.
18. ‘Civil Nuclear: roadmap to 2050’, Department for Energy Security and Net Zero, 26 January 2024.
19. ‘EDF announces Hinkley Point C delay and rise in project cost’, World Nuclear News 23 January 2026.
20. ‘Future Energy Scenarios: Pathways to Net Zero’, NESO, November 2025; see Table 3 on page 45 & page 143).
21. Breyer, C. et al ‘100% Renewable Energy for the United Kingdom’, LUT University Finland, for 100% Renewable UK Ltd, January 2023.
22. ‘The dawn of 24/7 solar power’, the Financial Times, 15 May 2026.
23. ‘24/7 Renewables Outcompete Fossil Fuels on Costs’, IRENA Press Release, 6 May 2026.
24. Toke, D., ‘The unbeatable combination of renewables and batteries’, Policy Brief, May 2026.
25. Ibid.
26. ’The household battery revolution that could change energy bills … and the world’, Adam Morton and Petra Stock, the Guardian, 31 May 2026.
27. Thellufsen, JZ et al., ‘Cost and system effects of nuclear power in carbon-neutral energy systems’, Applied Energy, Volume 371, 2024.
28. ‘Large Scale Electricity Storage’, Royal Society, 2023.
29. IRENA, May 2026.
30. ‘Can anything top lithium-ion’, PV Magazine, 30 March 2024.
31. ‘‘Blood cobalt’ is disappearing from batteries – and cheaper, cleaner batteries are arriving’, The Conversation, 19 February 2026.
32. ‘US start-up plans to drill for lithium under VW and BMW battery factories’, Financial Times, 2 June 2026.
33. ‘Betting on batteries: addressing intermittent inefficiencies at scale’, PV Magazine, 2 June 2026
34. ‘Why the Biggest Battery Company is Betting Against Lithium’, Undecided Tech, 8 April 2025.
35. Power Technology, 1 July 2024.
36. ‘Exclusive: sodium batteries to disrupt energy storage market’, PV Magazine 28th Nov 2025.
37. Council Fire, 16 June 2026.
38. ‘Salt is the new oil’, the Financial Times, 22 June 2026.
39. ‘Can the world’s biggest batteries keep Britain’s lights on?’, The Times, 20 June 2026.
40. Northern Ireland is part of the island of Ireland Electricity Market, whereas England, Wales and Scotland are part of the Great Britain market.
41. ‘Large Scale Electricity Storage’, Royal Society, September 2023.
42. Pete Roche, ‘Long Duration Energy Storage: the key to a 100% renewable energy grid’, Policy Brief, April 2026.
43. Great British Energy: Strategic Plan’, page 30
