Long-duration energy storage: what are the consequences of deploying 7.6 GW through Window 1?
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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Read moreFrequently asked questions
What is long-duration energy storage?
Long-duration energy storage (LDES) refers to technologies capable of storing and discharging electricity over longer periods. Under the Great Britain cap and floor framework, LDES assets are defined as technologies capable of storing energy for at least eight hours.
Why was this analysis undertaken?
The report was prepared to explore the wider system implications of Ofgem's proposed 7.6 GW Window 1 award and to assess the potential impact on consumers, investors and flexibility markets.
What did the modelling find?
The analysis suggests the proposed deployment pathway could result in:
- A £1.3 billion net socio-economic welfare impact
- A £1.6 billion consumer welfare impact
- Lower revenues for short-duration battery storage
- Reduced deployment of new battery storage projects
- Higher consumer exposure to cap and floor payments when compared with Baringa's central reference case.
What are the implications for battery energy storage systems?
The modelling indicates that increased levels of LDES could reduce revenue opportunities for short-duration battery storage assets. This could affect future investment decisions and the pace of deployment across the wider flexibility market.
Does the report support long-duration energy storage?
Yes. The report recognises that LDES will play a critical role in supporting a decarbonised electricity system. The analysis focuses on the scale and timing of deployment and explores how different procurement pathways could affect wider system outcomes.
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