Interview: practitioners on Long-duration energy storage (LDES) — what they wish they knew earlier

The UK's long-duration energy storage market is approaching a critical inflection point: National Grid ESO projects the country will require between 24 and 42 GW of LDES capacity by 2050 to achieve net zero, yet only 2.8 GW of pumped hydro currently operates on British soil. This gap represents both an extraordinary challenge and an unprecedented opportunity. We spoke with project developers, grid operators, and investors actively deploying LDES technologies across the UK to understand what they wish they had known before breaking ground—insights spanning duration requirements, degradation realities, revenue stacking complexities, and the labyrinthine path to grid integration.

Why It Matters

The urgency surrounding LDES deployment in the UK has intensified dramatically between 2024 and 2025. The Department for Energy Security and Net Zero released its Long Duration Electricity Storage consultation response in late 2024, establishing the Cap and Floor mechanism that will underpin bankable projects from 2026 onwards. This regulatory clarity arrived alongside sobering grid statistics: curtailment of renewable generation exceeded 8.5 TWh in 2024, costing consumers approximately £800 million—energy that could have been captured and time-shifted with adequate storage infrastructure.

Practitioners consistently emphasise that LDES fundamentally differs from the lithium-ion battery installations that have dominated UK storage development. While sub-four-hour batteries excel at frequency response and short-duration arbitrage, they cannot address the multi-day and seasonal storage requirements emerging as wind and solar penetration surpasses 50% of electricity generation. The 2024 winter period demonstrated this limitation starkly: a five-day wind drought in December required emergency coal and gas generation despite record renewable capacity being installed throughout the year.

The UK's geographic and climatic conditions create unique LDES requirements. The North Sea's wind patterns generate extended periods of either exceptional abundance or scarcity, necessitating storage durations far exceeding continental European norms. Practitioners report that 10 to 16-hour duration systems have become the minimum viable specification for new projects, with 24-hour and multi-day technologies increasingly attractive to offtakers concerned about security of supply.

Key Concepts

Understanding the LDES landscape requires familiarity with several interconnected concepts that practitioners navigate daily:

Transition Plan: A comprehensive strategic document outlining how an organisation or sector will shift from current operations to net-zero compatibility. For LDES developers, this encompasses technology selection, supply chain development, workforce training, and integration with evolving grid infrastructure. The UK Transition Plan Taskforce has established disclosure frameworks that increasingly influence investment decisions in the storage sector.

Distributed Energy Resources (DER): Decentralised power generation and storage assets connected at distribution rather than transmission level. LDES technologies, particularly flow batteries and compressed air systems, are increasingly deployed as DER assets, enabling local resilience while providing grid services. This distributed approach creates complex aggregation and dispatch challenges that practitioners report underestimating in early project planning.

Critical Minerals: The raw materials essential to storage technology manufacturing, including lithium, vanadium, cobalt, and rare earth elements. UK practitioners express growing concern about supply chain concentration, with China controlling over 60% of global lithium processing and 80% of vanadium production. This dependency has accelerated interest in technologies using more abundant materials, such as iron-air and sodium-based chemistries.

Demand Charges: Tariff components based on peak power consumption rather than total energy usage. LDES systems can substantially reduce industrial and commercial demand charges by shaving consumption peaks, creating a revenue stream that practitioners describe as more predictable than wholesale market arbitrage but requiring sophisticated load forecasting capabilities.

Interconnection: The physical and regulatory process of connecting storage assets to electricity networks. UK practitioners universally cite interconnection as their greatest operational challenge, with grid connection queues extending beyond 2030 in many regions and costs escalating from £5,000 per MW in 2020 to £40,000 or more by 2025 for transmission-connected projects.

What's Working and What Isn't

What's Working

Revenue Stacking Through Multiple Markets: Successful LDES projects in the UK have achieved bankability by aggregating revenue streams across wholesale energy arbitrage, Balancing Mechanism participation, capacity market contracts, and ancillary services including dynamic containment and frequency response. Practitioners report that projects securing three or more revenue streams demonstrate 30 to 40% higher internal rates of return than single-revenue-source developments. The key insight is that LDES duration capabilities unlock market opportunities inaccessible to shorter-duration batteries, particularly in extended intraday arbitrage windows.

Colocation with Renewable Generation: LDES facilities positioned adjacent to wind and solar installations demonstrate markedly improved economics by capturing otherwise-curtailed generation directly behind the meter. The Whitelee Extension in Scotland, pairing storage with the UK's largest onshore wind farm, exemplifies this approach, reducing grid congestion while improving overall project revenues by an estimated 25%.

Technology Agnosticism in Project Development: Practitioners report that the most successful development teams maintain flexibility across LDES technologies rather than committing early to specific chemistries. Projects structured to accommodate compressed air, flow batteries, or gravity-based systems depending on final site conditions and supply chain dynamics have progressed more rapidly through development stages than technology-locked equivalents.

What Isn't Working

Overconfidence in Degradation Modelling: Multiple practitioners describe significant discrepancies between manufacturer degradation projections and operational reality. Flow battery systems in particular have exhibited capacity fade rates 15 to 25% faster than datasheet specifications under UK temperature cycling conditions. This underestimation impacts revenue projections and can trigger covenant breaches in project finance structures. The industry is responding with independent testing protocols, but standardisation remains elusive.

Underestimating Interconnection Complexity: The UK's grid connection process has become a primary impediment to LDES deployment. Practitioners describe multi-year delays, escalating costs, and repeated scope changes from network operators as project-defining challenges. One developer noted that interconnection costs now represent 20% of total project capital, up from 8% five years ago. The recently introduced queue management reforms have yet to demonstrate meaningful improvement in processing times.

Inadequate Dispatch Optimisation Capability: Operating LDES assets profitably requires sophisticated forecasting and trading capabilities that many project sponsors have underestimated. The complexity of coordinating across multiple revenue streams, managing state of charge for varying duration requirements, and responding to grid signals in real-time demands technology platforms and human expertise that add £2 to £4 per kW per month in operational costs. Projects that budgeted for passive, set-and-forget operations have consistently underperformed.

Key Players

Established Leaders

EDF Energy: Operating the UK's largest pumped hydro facility at Dinorwig in Wales with 1.7 GW capacity, EDF brings unmatched experience in long-duration storage operations to the UK market. The company is actively exploring compressed air and hydrogen storage technologies to complement its nuclear fleet.

SSE Renewables: As developer of the Coire Glas pumped hydro project in Scotland, SSE is advancing the UK's largest new storage development with 1.5 GW capacity and 30 GWh potential storage. The company's integrated approach linking storage with its extensive wind portfolio demonstrates the emerging developer playbook.

Highview Power: Pioneering liquid air energy storage (LAES) technology, Highview is constructing a 50 MW / 250 MWh facility near Manchester, representing the largest LAES installation globally. The company's technology uses no critical minerals and provides 8 to 10-hour duration capabilities.

Drax Group: Building on its legacy in dispatchable power, Drax is developing LDES capabilities to complement its biomass operations. The company's grid balancing expertise positions it well for storage integration, with active projects in the Yorkshire region.

Centrica: Through its energy storage subsidiary, Centrica operates multiple grid-scale storage assets and provides aggregation and optimisation services to third-party LDES developers. The company's trading desk offers route-to-market services that smaller developers increasingly require.

Emerging Startups

Invinity Energy Systems: Headquartered in the UK, Invinity manufactures vanadium flow batteries specifically designed for 4+ hour duration applications. The company has deployed over 70 MWh across operating projects and maintains a 1.7 GWh project pipeline with significant UK exposure.

Gravitricity: Edinburgh-based Gravitricity is commercialising gravity-based storage using suspended weights in underground shafts. The technology promises 50-year operational life with minimal degradation, addressing durability concerns plaguing electrochemical alternatives.

Storelectric: Developing compressed air energy storage (CAES) projects in salt caverns beneath Cheshire, Storelectric targets multi-GWh facilities capable of seasonal storage durations. The company's first project aims for 40+ hours of discharge capacity.

RheEnergise: This UK startup employs dense fluid pumped hydro technology enabling installations on hills rather than requiring mountains. The approach substantially expands geographic suitability while maintaining 8 to 16-hour duration capabilities.

Cheesecake Energy: Utilising compressed air and thermal storage in a hybrid configuration, this Nottingham-based company targets 12-hour duration applications. Its modular approach enables deployment without extensive civil engineering requirements.

Key Investors & Funders

UK Infrastructure Bank: The state-backed institution has designated LDES as a priority sector, committing £1.5 billion to storage projects through 2030. Its participation reduces financing costs and provides credibility for first-of-kind technologies.

Legal & General Capital: Deploying pension capital into infrastructure, L&G has made significant commitments to UK storage projects, particularly favouring pumped hydro with its 40+ year operational profiles matching long-term liability matching requirements.

Gresham House: Managing dedicated UK energy storage funds, Gresham House has deployed over £500 million into battery and LDES assets. The firm's operational experience across its portfolio provides insights that newer entrants lack.

Gore Street Capital: Specialising in energy storage infrastructure, Gore Street operates an LSE-listed fund with significant UK LDES exposure. The company's public market access provides liquidity for early investors and development partners.

Scottish National Investment Bank: Mandated to support Scotland's net zero transition, SNIB has prioritised LDES investments given the country's exceptional wind resources and storage opportunities, including backing for Coire Glas and compressed air developments.

Examples

1. Dinorwig Pumped Hydro, Wales: Operational since 1984 with 1.7 GW capacity and approximately 9.1 GWh storage, Dinorwig demonstrates LDES longevity with 40 years of reliable operation. The facility responds within 16 seconds to grid calls, providing both duration and flexibility. Annual revenues exceed £100 million through a combination of capacity contracts and balancing services, establishing the economic template for new pumped hydro developments.

2. Highview Power Carrington Facility, Greater Manchester: Under construction with 50 MW / 250 MWh specifications, this liquid air energy storage installation represents commercial-scale validation of cryogenic technology. The project secured a 15-year capacity market contract and Grid Forming capability designation, unlocking premium revenue streams. Practitioners cite this project as evidence that non-electrochemical LDES can achieve bankability in the current UK market framework.

3. Invinity Flow Battery Installation, Oxford: Deployed at the Energy Superhub Oxford, this 2 MW / 5 MWh vanadium flow battery provides 2.5-hour duration in an urban environment. Operating data from 2023-2024 demonstrated 97% round-trip efficiency retention after 3,000 cycles, addressing practitioner concerns about flow battery degradation. The installation supports local renewable integration while providing National Grid ancillary services, demonstrating the DER model for LDES assets.

Action Checklist

• Conduct technology-agnostic feasibility assessments before committing to specific LDES chemistries, ensuring site conditions match technology requirements
• Secure grid connection offers early in development, allocating 20-25% of capital budget for interconnection costs and potential reinforcement requirements
• Develop multi-revenue business models incorporating at least three income streams before approaching project finance lenders
• Implement independent degradation testing protocols rather than relying solely on manufacturer specifications
• Engage specialist energy trading partners or develop in-house dispatch optimisation capabilities before commercial operations commence
• Map critical mineral supply chains and establish secondary sourcing arrangements for key battery materials
• Participate in DESNZ consultations to ensure policy developments support project economics
• Structure offtake agreements with duration-specific provisions that capture LDES value premiums over short-duration alternatives
• Build relationships with distribution network operators for DER deployment pathways as transmission connection queues extend
• Establish community benefit frameworks early to accelerate planning consent timelines

FAQ

Q: How do LDES degradation rates in UK conditions compare to manufacturer claims? A: Practitioners consistently report that real-world degradation exceeds manufacturer projections by 15 to 30% depending on technology. UK temperature cycling, particularly in unheated facilities, accelerates calendar aging in electrochemical systems. Flow batteries demonstrate better long-term stability but require electrolyte maintenance exceeding datasheet assumptions. Independent testing is essential: projects should budget for 10% capacity reserves and annual performance verification to avoid covenant breaches in financing agreements.

Q: What duration specifications are lenders and offtakers now requiring for bankable UK LDES projects? A: The market has shifted decisively toward longer durations since 2023. Capacity market contracts increasingly favour 6+ hour assets, while commercial and industrial offtakers seeking energy security typically require 10 to 16-hour discharge capabilities. Seasonal storage remains largely unbankable without government support, but the Cap and Floor mechanism is expected to enable 24-hour-plus projects from 2027 onwards. Projects specifying less than 4-hour duration now face significant financing headwinds.

Q: How are successful projects structuring revenue stacking across UK electricity markets? A: The most robust LDES business cases layer wholesale arbitrage (capturing extended price differentials across 8+ hour windows), Balancing Mechanism participation (enabled by Grid Forming capabilities), capacity market contracts (now explicitly rewarding longer duration), and ancillary services including frequency response and reserve products. Practitioners emphasise that optimising across these markets requires sophisticated trading platforms and experienced personnel—operational costs of £2 to £4 per kW per month should be factored into project economics.

Q: What are realistic timelines for grid connection in current UK market conditions? A: Connection timelines have extended dramatically, with transmission-connected projects now facing 8 to 12-year queues in constrained regions. Distribution-connected projects (typically under 50 MW) can achieve connection within 3 to 5 years but face capacity limitations. The most successful developers secure connection offers before site acquisition, treat grid access as a primary constraint rather than subsequent consideration, and increasingly collocate with existing connected assets to accelerate energisation.

Q: How does the Cap and Floor mechanism change LDES project economics? A: The Cap and Floor mechanism, operational from 2026, provides revenue certainty that fundamentally transforms LDES bankability. Projects receive a guaranteed minimum revenue floor while sharing upside above a defined cap with consumers. This structure enables 15 to 20-year debt tenors previously unavailable to storage projects, reducing weighted average cost of capital by an estimated 200 to 300 basis points. Practitioners advise that projects should be positioned for the first allocation round, expected in late 2025, as early recipients will benefit from regulatory learning curves.

Sources

• Department for Energy Security and Net Zero, "Long Duration Electricity Storage: Government Response to Consultation," December 2024
• National Grid ESO, "Future Energy Scenarios 2024," July 2024
• UK Infrastructure Bank, "LDES Investment Strategy Update," September 2024
• Energy Systems Catapult, "Storage Requirements for Net Zero: Technical Assessment," March 2025
• Cornwall Insight, "UK Energy Storage Market Outlook 2025-2035," January 2025
• The Royal Society, "Large-Scale Electricity Storage," September 2023
• Ofgem, "Electricity Network Access and Connection Reform Consultation," October 2024