The government has selected 7.6 gigawatts of long-duration energy storage projects for a new cap and floor scheme, enough to power roughly 7 million homes for several hours. That is not a headline about heat pumps or solar panels, but it matters more to your electricity bill than either of those upgrades alone.
As reported by Renewables Now, the UK’s cap and floor mechanism for long-duration energy storage (LDES) has cleared 7.6 GW of projects. These are not the lithium-ion batteries you see in garage adverts; they are pumped hydro, compressed air, and liquid air systems that can discharge for six hours or more. The cap protects developers from low revenues; the floor guarantees a minimum income so investors can finance construction.
Why it matters to your quarterly bill
Britain’s electricity grid still relies on gas-fired power stations when the wind does not blow and the sun does not shine. Those plants are expensive to run, and their costs land directly on household bills via the wholesale price. Long-duration storage can soak up cheap renewable power at 3am and release it at 6pm when demand peaks. Ofgem estimates that every 1 GW of LDES displacing gas could cut wholesale costs by roughly £50 million a year. Spread across 28 million households, that is about £1.80 per home annually per GW. With 7.6 GW in the pipeline, the theoretical saving is £13–14 a year, modest, but real, and growing as more projects come online.
The catch is timing. Most of these projects will not generate power until 2028 at the earliest. The cap and floor scheme itself needs final regulatory approval from Ofgem, and developers must still secure planning permission and grid connections. Households on standard variable tariffs will not see a line item labelled “LDES saving” on their bill this winter.
What this means for your EPC and home upgrades
This policy is about grid infrastructure, not cavity-wall insulation. Your Energy Performance Certificate will not improve because a pumped-storage plant opens in Scotland. But there is an indirect link: cheaper off-peak electricity makes heat pumps more economical. A typical 3-bed semi running a heat pump uses about 4,000 kWh of electricity annually for heating. If LDES shaves 2p per kWh off the wholesale component of that electricity, the annual saving is £80, enough to tip the payback calculation for a £12,000 heat pump installation by about a year.
Energy Saving Trust data shows that heat pumps currently cost roughly 30% less to run than gas boilers when using a time-of-use tariff. More LDES capacity will widen that gap. Homeowners considering a heat pump should factor in that grid-level storage improvements are coming, even if they are not here yet.
Who pays, and who benefits
The floor payments are funded through a levy on electricity suppliers, which is passed to households. Ofgem has not published the per-unit cost yet, but similar schemes (like the Contracts for Difference for renewables) add roughly £12–£15 a year to a typical bill. The net effect should be positive: the floor cost is smaller than the wholesale savings from displacing gas. But the distribution is uneven. Households on time-of-use tariffs will capture more of the benefit because they can shift consumption to cheap storage periods. Those on flat-rate tariffs will see a smaller net gain.
What this misses: the scheme does nothing for households off the gas grid who rely on oil or LPG. Those homes pay roughly 12p–15p per kWh for heating, more than double the current electricity price. LDES does not help them directly. A separate policy, like extending the Boiler Upgrade Scheme to cover oil-to-heat-pump conversions, would matter more for that 1.5 million households.
What to do now
If you are planning a home upgrade, do not wait for LDES projects to materialise. The Boiler Upgrade Scheme offers £7,500 off a heat pump today. Solar panels with battery storage let you capture your own cheap power now. Check your current electricity tariff: if you are on a standard variable rate, switching to a time-of-use tariff (like Octopus Flux or EDF’s GoElectric) will let you benefit from lower off-peak prices as storage capacity grows. The Energy Saving Trust’s home energy check tool (gov.uk) can show you the best upgrades for your property. Start now; the grid will catch up later.
Frequently Asked Questions
No. The selected projects still need final regulatory approval, planning permission, and construction, most will not operate before 2028. Near-term bill savings are unlikely, but the long-term effect should lower wholesale costs by displacing expensive gas-fired generation.
No. The LDES cap and floor is a grid-level infrastructure policy. It does not change the Boiler Upgrade Scheme (£7,500 for heat pumps), the Great British Insulation Scheme, or any other household grant. Those programmes remain separate and are funded through general taxation and supplier obligations.
