The UK’s first long-duration energy storage (LDES) support round has selected three pumped storage hydro projects, a concrete step towards a grid that can store renewable power for hours, not just minutes. For the 28 million households who saw their electricity bills rise by £700 over two years, the question is whether this translates into lower costs or just another subsidy on the standing charge.
As reported by International Water Power, the three projects, including Coire Glas in Scotland and two others, will collectively add several gigawatts of storage capacity. The LDES support mechanism, designed by the Department for Energy Security and Net Zero and overseen by Ofgem, offers revenue certainty to developers through a cap-and-floor model. But what does this mean for a household in a three-bed semi in Milton Keynes?
Why pumped storage matters for your bill
Pumped storage hydro works like a giant battery: water is pumped uphill when electricity is cheap (windy nights, sunny afternoons) and released through turbines when demand spikes. Currently, the grid relies on gas-fired peaker plants to meet those spikes, plants that burn expensive fuel and push up wholesale prices. Ofgem data shows that gas plants set the wholesale price for 60-70% of hours, even when they supply only a fraction of total generation.
The three LDES projects could displace some of that gas. Every MWh stored and released from pumped hydro means one less MWh from a gas peaker. At current gas prices, that could shave £5-10 per MWh off wholesale costs, according to estimates from the Carbon Trust. For a typical household using 2,900 kWh of electricity a year, that’s a saving of £15-30 annually, modest, but real, and likely to grow as more storage comes online.
But the catch is timing. Coire Glas alone won’t be operational until the late 2020s at the earliest, and the full portfolio may take until the mid-2030s. Householders should not expect a sudden drop in their direct debit next April.
Who qualifies, and who doesn’t
The LDES support round is not a consumer grant. It’s a regulatory mechanism that guarantees developers a minimum revenue (the floor) while capping their profits (the cap). If wholesale prices fall, the floor ensures projects remain viable; if prices surge, the cap returns excess revenue to consumers via Ofgem’s network charges.
Households on standard variable tariffs will see these costs embedded in their standing charge, not their unit rate. The Energy Saving Trust notes that network charges currently account for about 15% of a typical bill, roughly £100 a year. The LDES scheme will add a small fraction to that, perhaps £2-5 annually, but the net effect should be neutral or slightly positive as gas costs fall.
Those with solar panels and home batteries may benefit more indirectly: a more stable grid means fewer price spikes. That makes it easier to sell surplus solar power at decent rates. But the direct impact on a household’s energy bill is likely to be small and slow.
What this misses, and what comes next
The LDES round is a good start, but it addresses only one piece of the puzzle. Pumped storage is excellent for multi-hour storage, but it cannot handle the seconds-to-minutes fluctuations that home batteries and grid-scale lithium-ion systems manage. The government’s own modelling, published in the 2023 Powering Up Britain strategy, suggests the UK needs 20 GW of LDES by 2050. These three projects deliver roughly 4 GW.
Also, the cap-and-floor model is untested for pumped storage at this scale. Documents seen by The Guardian last year flagged concerns that developers might overstate costs, pushing the floor higher than needed. Ofgem has promised a review after the first year of operation.
For homeowners, the practical takeaway is this: the shift to renewable storage will take a decade, not a year. But every MWh stored is a MWh not burned from gas. If you’re considering a home battery, the economics remain driven by solar self-consumption and time-of-use tariffs, not grid-scale storage. The LDES projects are a hedge against future price volatility, not a reason to delay your own upgrades.
What to do now
Households interested in reducing their energy bills should focus on what they can control: insulation, heat pumps, and solar panels. The Boiler Upgrade Scheme offers £7,500 for a heat pump, and the Smart Export Guarantee pays for surplus solar. None of these depend on LDES. But if you’re on a time-of-use tariff like Octopus Flux or EDF’s GoElectric, you may see slightly better export rates as grid-scale storage reduces daytime price suppression.
The LDES support round closes for new applications in 2025. The three selected projects will begin construction within two years. For updates, check Ofgem’s LDES page or the Energy Saving Trust’s storage guide. Your bill won’t change overnight, but the grid that powers your home just got a little more renewable.
Frequently Asked Questions
The impact is indirect and modest, likely £15-30 a year in savings as gas peaker plants are displaced. Most benefits will appear in wholesale prices, not your standing charge, and will take several years to materialise.
No. Home batteries and grid-scale storage serve different purposes. The economics of home batteries depend on your solar generation and time-of-use tariff, not on pumped storage. The Boiler Upgrade Scheme and Smart Export Guarantee remain the best near-term options for reducing bills.
