The UK spent £2.3bn on gas-fired power generation last winter alone, money that flowed straight to fossil fuel suppliers while households froze under record bills. That figure could shrink dramatically if Ofgem’s latest assessment of long-duration energy storage translates into real projects.
Frontier Power, a developer of pumped hydro and compressed-air storage, received a positive regulatory assessment from Ofgem for its UK long-duration storage projects, as reported by bestmag.co.uk. The regulator’s nod is a procedural step, but it signals something bigger: the government is finally treating storage as infrastructure, not a niche experiment.
What long-duration storage does for your bill
Britain’s electricity system has a basic mismatch. Wind farms generate most when it’s windy, often at night or in storms, but peak demand hits weekday evenings when renewables are scarce. The gap is currently filled by gas plants, which set the wholesale price for everyone. That’s why households on standard variable tariffs saw their annual bills jump by £700 in 2022.
Long-duration storage (6-12 hours of discharge) flips this. It soaks up cheap renewable power when supply exceeds demand and releases it when gas plants would otherwise fire up. National Grid ESO estimates that 10 GW of such storage could reduce wholesale electricity costs by £2bn a year, savings that flow directly to household bills through the price cap mechanism.
Ofgem’s own analysis, published in its 2023 annual report on electricity markets, found that every 1 TWh of gas displaced by storage cuts household bills by roughly £40m. Frontier Power’s projects, if built at scale, could displace 8-10 TWh annually, equivalent to the output of two gas-fired power stations.
Who pays for the upfront cost
The catch is that long-duration storage is expensive to build. Frontier Power’s pumped hydro facility in Scotland would cost around £1.5bn and take seven years to complete. Developers need guaranteed revenue streams to attract investment, and those guarantees ultimately come from billpayers through network charges or capacity market payments.
Ofgem’s positive assessment is built to reduce that cost. By granting ‘regulated asset base’ status, the regulator allows developers to recover costs over 30-40 years at lower interest rates, similar to how water companies finance reservoirs. The Energy Networks Association estimates this could cut the cost of storage projects by 25-30% compared to merchant financing.
But the devil is in the detail. Consumer groups including Which? have warned that if Ofgem sets the allowed return too high, households could end up paying more for storage than the savings it delivers. The regulator has not yet published the specific cost assumptions for Frontier Power’s projects.
What this means for your EPC and heat pump
Homeowners don’t need to install a battery to benefit from this shift. Lower wholesale electricity prices make heat pumps and electric vehicles cheaper to run relative to gas boilers and petrol cars. The Energy Saving Trust calculates that switching from a gas boiler to a heat pump currently saves a typical 3-bed semi around £200 a year, but that saving could rise to £400 if wholesale electricity falls by 20% thanks to storage.
EPC ratings also improve indirectly. The ‘environmental impact rating’ on your certificate assumes a carbon intensity for grid electricity. As storage pushes gas off the system, that carbon factor drops, meaning your heat pump or solar panels look greener on paper, potentially lifting your EPC from D to C without you lifting a tool.
Ofgem’s decision on Frontier Power’s full business case is expected by March 2025. If approved, construction could begin in 2026, with the first storage delivering to the grid by 2030. That timeline means households won’t see bill savings until the next decade, but the regulatory groundwork is being laid now.
Frequently Asked Questions
No. Long-duration storage operates at grid scale, not household level. You benefit automatically through lower wholesale electricity prices, which reduce your bills via the price cap. You don't need to buy or install any equipment yourself.
Not before 2030. Frontier Power's projects are still in regulatory assessment. If approved, construction takes 5-7 years. Bill savings will appear gradually as storage displaces gas generation, but early benefits may be offset by upfront network charges to pay for the infrastructure.
