On Friday, June 26, Ofgem published a list of 16 projects it intends to award long-duration electricity storage contracts under a scheme that exists nowhere else on Earth. The portfolio totals 7.6 gigawatts and 136.9 gigawatt-hours of storage capacity spanning five chemistries across four broad technology groups: pumped storage hydro, lithium-ion BESS, compressed air energy storage (CAES), vanadium redox flow batteries (VRFB), and zinc hybrid cathode (Eos Z3) batteries. What makes this moment significant is not the hardware itself, those technologies are mature. What matters is the framework: Ofgem is offering these developers a minimum revenue guarantee paired with a profit cap, removing the central investment risk that has strangled long-duration storage deployment globally. No other jurisdiction has built this tool yet.
The 16 winners emerged from 77 shortlisted projects representing 27 gigawatts, selected in this initial window at the absolute ceiling of Ofgem's 2.7–7.7 GW guidance range. The portfolio skews heavily toward Scotland, where wind generation capacity vastly outpaces the grid's ability to transmit it southward to demand centers. The three largest projects are pumped hydro schemes: Earba at 1.8 GW, Coire Glas at 1.4 GW, and Loch Kemp at 600 MW. Lithium-ion BESS projects account for five slots totaling 1.6 GW across 26.8 GWh, an average duration of 16.75 hours per unit, approaching the 18-20 hour range where long-duration storage begins to compete with gas peaker plants on availability grounds. Two smaller projects use compressed air, and the remainder are flow batteries, a chemistry that can achieve durations beyond 24 hours but currently has higher capital costs per megawatt-hour than lithium-ion.
Lithium-ion's inclusion was not certain until recently. The initial scheme design excluded BESS as insufficiently durable for multi-decade operation, but industry pressure forced Ofgem to reconsider. The decision matters because it opens the cap-and-floor framework, which Ofgem estimates could be worth hundreds of millions in revenue support, to the cheapest, fastest-deployable storage technology available. Field secured five slots in the portfolio (Field Netherton, Field New Deer, Field Rigifa, Field Fyrish in Scotland, and Field Long Stratton in England), totalling 1.6 GW. East Claydon (500 MW) and Sundon (500 MW) are owned by Statera Energy. That pressure point, whether batteries can reliably discharge for most of a working day without degradation, will shape technology selection across Europe and Asia as other regulators copy Ofgem's framework.
The scheme works by setting a strike price: if revenue from wholesale electricity markets plus ancillary services falls below the guaranteed floor, Ofgem (and ultimately British ratepayers) makes up the difference. If revenue exceeds the strike price by more than the cap, the developer rebates the excess back into the grid. This structure removes the bet-your-company risk that has deterred capital from LDES projects, developers no longer need to assume perfect forecasts of long-term electricity price curves or grid service values. Instead, they face bounded downside and capped upside. Consultation on the shortlist closes August 7; Ofgem expects to publish final awards later this year, creating visibility for construction finance in H1 2027.
Who benefits: developers with projects in the portfolio unlock certainty; grid operators and wind farms in Scotland gain an emissions-free way to absorb excess generation; and long-duration storage equipment manufacturers gain a 7.6 GW demand signal from a G7 economy. Who does not: gas peaker operators lose the margin they currently capture when renewable generation drops; battery makers dependent on price-floor auctions in other markets face higher comparative risk in regions without similar revenue guarantees; and jurisdictions that delay copying Ofgem's framework fall further behind in grid decarbonization. The real implication is structural: by removing investment uncertainty, cap-and-floor unlocks capital that was previously locked behind 15-year payback assumptions. Watch three things: whether consultation feedback forces material revisions to the final portfolio, whether the first project reaches financial close in 2027 (proving lender appetite for this framework), and whether the EU, US, or Australia announce similar schemes within 18 months.