Battery storage infrastructure

Long-duration energy storage: what are the consequences of deploying 7.6 GW through Window 1?

0 min read 9 July 2026 By Vikash Ahuja, John Perkins, and Matthew Grant, experts in GB Energy Market

New analysis explores the implications of Great Britain's proposed first wave of long-duration energy storage deployment for consumers, investors and the wider electricity system.

Baringa's analysis examines the potential impacts of Ofgem's proposed 7.6 GW long-duration energy storage (LDES) award through Window 1 of the cap and floor scheme. Supporting LDES can deliver lower cost decarbonisation, but this study explores how different deployment pathways could affect consumer costs, storage investment and wider power system outcomes between 2030 and 2055. 

About this report

This report was prepared by Baringa on behalf of Constantine, Eelpower, Fidra, Pulse, Revera, Voltwise and Zenobe. It assesses the potential system-wide impacts of the proposed 7.6 GW LDES award and compares this with Baringa's central market outlook (reference case) for long-duration storage deployment.

Download the report to explore the analysis, methodology and implications for energy market participants, investors, developers and policymakers.

Key findings

The analysis indicates a £1.3 billion net socio-economic welfare loss

Compared with Baringa's Reference Case assumption of 4.4 GW, the report finds the proposed 7.6 GW deployment scenario results in a negative net socio-economic welfare impact of approximately £1.3 billion over the period 2030-2055.

Consumers bear a significant impact

The modelling suggests a consumer welfare loss of approximately £1.6 billion, driven by higher cap and floor payments and wider wholesale market effects in the 7.6 GW scenario.

Long-duration storage may affect investment in battery storage

The report estimates that lower revenues could contribute to around 5 GW less short-duration storage capacity being delivered by 2035.

The analysis indicates that increased LDES deployment will reduce revenues available to short-duration battery storage projects, with modelled revenues for two-hour battery energy storage systems falling by 13%.

Consumer exposure to cap and floor payments increases

The modelling suggests higher levels of LDES could increase the likelihood of floor payments under the cap and floor mechanism, leading to additional consumer costs of approximately £110 million per year on average.

 What does the report examine?

Long-duration energy storage will play an important role in supporting a decarbonised electricity system. Technologies capable of storing energy for eight hours or more can help integrate renewable generation, improve system balancing and reduce reliance on fossil fuel generation.

In June 2026, Ofgem announced a minded-to decision to award 7.6 GW of long-duration energy storage capacity through the first cap and floor allocation window. This level sits at the upper end of the range recommended by NESO.

Prepared by Baringa on behalf of Constantine, Eelpower, Fidra, Pulse, Revera, Voltwise and Zenobe, this report explores the potential consequences of that decision across the wider electricity system. It compares a 7.6 GW deployment scenario with Baringa's central Reference Case of 4.4 GW of LDES by 2035 and assesses the impact on consumers, market revenues and future flexibility investment.

Who should read this report?

This report will be relevant to:

  • Energy storage developers and operators
  • Utilities and energy suppliers
  • Infrastructure and energy investors
  • Policymakers and regulators
  • System operators and network companies
  • Energy traders and market participants
  • Organisations with an interest in the future evolution of Great Britain's power system
 

Want to discuss the future role of long-duration energy storage, flexibility markets or power system investment? Contact one of our experts to continue the conversation. 

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