Everything you need to know about Long Duration Energy Storage
What is Long Duration Energy Storage?
Long Duration Energy Storage, or LDES for short, as the title namesake, is a form of longer duration storage. There was historically a question in the industry as what constituted ‘long duration’ where many considered it to be 4hrs+ until very recently in March 2025 when Ofgem in their Technical Decision Document published that LDES must sustain full rated power for a minimum of 8 hours for a period of 25 years under their cap and floor scheme.
What were the requirements of applying to the cap and floor scheme?
In April 2025, Ofgem launched the first application for the Long Duration Energy Storage, cap and floor scheme. The scheme was open to the industry to submit their plans for a qualifying project. The scheme was split into two tracks (track one is projects connecting pre-2030, and track two, which is projects connecting between 2030 and 2033) and two technology streams, each having its own individual requirements.
The technology stream you could apply for was down to the applicant, and each stream had it’s own “Technology Readiness Level” which is a standardized scale to measure maturity; from basic research (TRL 1) to full scale deployment and qualified through successful operation (TRL 9) – in this instance, the scheme was open to TRL 8 and TRL 9 technology classes.
Ofgem designated these two levels as Stream 1 (TRL9) and Stream 2 (TRL8) with a minimum entry requirement of 100MW/800MWh and 50MW/400MWh respectively – in layman’s terms, this meant any qualifying technology that fell under “storage” could apply to the scheme, examples include pumped hydro storage which would be designated as Stream 1 (TRL 9), compressed air storage and high energy supercapacitors would be designated as Stream 2 (TRL 8). It is down to the technology provider to justify where they believe their technology sits in the TRL scale.
The caveat however is that the technology must provide continuous power, for eight hours, at their rated nameplate capacity for a minimum of 25-years.
How could a Lithium-ion BESS guarantee that duration over a 25year period?
Lithium BESS sits in Stream 1, which had a minimum entry at 100MW/800MWh. If this was built and operational today, then it would be one of the largest Lithium projects in the world by duration. The current longest duration battery that is operational using Lithium technology is 6hrs in duration and sized at 250MW/1500MWh*.
*Public provided information of operational batteries. Does not include those in development or construction. (Source: BESS 100)
There are two main approaches that a developer/owner could adopt.
- They could significantly oversize the battery at build so at 25 years, it still maintains the 8-hour discharge duration at nameplate capacity.
- The battery could be continually augmented throughout its operational life to achieve the 8hr duration.
The former is the simplest approach, as it doesn’t require any additional planning modifications, land right negotiations e.g. extension of red line boundaries, as well as engineering considerations such as DC/DC converters.
How does the cap and floor scheme work?
The cap and floor scheme will behave very similarly to Contracts for Difference (CfD’s). When the market price falls below a pre-determined threshold i.e. the “floor price” then revenues will be topped up by Ofgem – this guarantees your projects revenue over the 25-year contract period. This is good news for investors as it not only makes your projects highly bankable, but it also provides a shield from economic influences by providing a stable revenue stream.
On the other side of the coin, if the market price goes above the determined ceiling (“cap”), then the delta cost (the difference between the ceiling and market price) will be paid back to Ofgem.
In essence, this type of structure acts as a price stabiliser. It encourages investment in long-duration storage whilst keeping costs manageable for consumers.
If you’re application proves successful, then you will be granted a LDES license.
What does the cap and floor scheme look to achieve?
Very simplistically, the cap and floor scheme is designed to incentivise investment in long duration energy storage schemes.