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Clean power

ESN response to LDES cap and floor scheme calls for greater clarity

Date
June 27, 2025

Table Contents

At a glance

ESN members strongly support the development of a cap and floor mechanism, but have raised concerns over the lack of clarity on eligibility rules – particularly around grid connection dates and financial commitments – and the absence of a clear target capacity for the scheme’s first window. We recommend that Ofgem and DESNZ urgently provide more detailed guidance and set a clear capacity target, aligned with wider energy system planning processes.

The ESN also calls for a more transparent and consistent project assessment framework, with published scoring criteria, recognition of key system benefits (such as avoided network reinforcement and curtailment), and consideration of hybrid and co-located projects.

A full list of recommendations is included in our consultation response, which aims to ensure the scheme is accessible, fair and strategically aligned with Clean Power 2030 delivery. Our top five recommendations are included below.

Key recommendations

  • Ofgem and DESNZ to set a clear, overall LDES capacity target for window 1 that is communicated to the sector as soon as practically possible and accounts for project attrition. This should include how this relates to other NESO analyses (e.g. FES 2025 and SSEP).
  • Ofgem to provide further detailed guidance, templates and examples of the evidence required for the project assessment process to help reduce the risk of being challenged by the sector.
  • Ofgem should outline a formal and more detailed breakdown of the MCA structure with published scoring/weightings for each assessment strand. This should include clear rules on how non-monetised impacts are evaluated and integrated into the overall score.
  • Ofgem and DESNZ to review competitive bid-based assessments for the first window. Use administrative benchmarks by technology group to create fairness and comparability.
  • Ofgem to publish a clear overall LDES capacity target, accounting for project attrition, to be communicated to the sector as early as possible to support effective investment and delivery planning. Ofgem to confirm that they will be engaging with NESO around this LDES target in the context of FES 2025 (and beyond), SSEP, CSNP and RESPs.

A reminder that we have several Electricity Storage Network member working groups coming up – see our events page. And tickets are now available at an early bird rate for this year's ESN Annual Conference, taking place in November. Sponsorship and exhibition opportunities are available – contact Olly.

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