The Department for Energy Security and Net-Zero (DESNZ) has today (October 10) announced it will proceed with a new investment support scheme that will support the development of Long Duration Electricity Storage (LDES), such as pumped storage hydro.
The announcement follows a consultation held earlier this year where Scottish Renewables supported a cap and floor' scheme to encourage investment in LDES.
The cap and floor model announced by DESNZ provides a guaranteed minimum income for developers, in return for a limit on revenues.
Ofgem has agreed to act as regulator and delivery body and the scheme's first round is expected to be open to applicants next year.
Andrew MacNish Porter, Head of Economics and Markets, said:
"We are pleased that DESNZ has confirmed a cap and floor scheme will be introduced to support investment in long-duration electricity storage, such as pumped storage hydro.
"As we deploy more renewable energy, long duration storage is essential for ensuring clean power generated by renewables can be stored for when we need it most.
"The cap and floor scheme will bring forward investment in these vital projects so they can begin delivering benefits to consumers and providing new jobs and economic growth across Scotland.
"We are encouraged that Ofgem has been appointed as the delivery partner for the cap and floor as we recommended in our response to the UK Government's consultation earlier this year.
"We now urge Ofgem to move swiftly in developing the details of the cap and floor scheme. With support from industry, Ofgem must act with urgency to ensure that cap and floor is implemented as soon as possible to allow shovel ready pumped storage hydro projects in Scotland to begin construction."
Notes
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UK Government press release: New scheme to attract investment in renewable energy storage.
