Long duration electricity storage cap and floor

The long duration electricity storage cap and floor is a proposed UK state support mechanism to encourage the development of more long duration energy storage (LDES) on the National Grid. This aims to support future investment in LDES project, such as pumped storage hydroelectricity, which have high up-front capital cost but lower operating costs. The "cap and floor" contracts would offer a top-up when wholesale market prices are below a set "floor", but projects would have to pay back excess profits above the cap. The mechanism would be funded through electricity consumer bill, but Ofgem expect the scheme to be broadly neutral over time on energy bills.