Energy storage floor video

What is a 'cap-and-floor' energy storage scheme?

The UK government has today launched a new scheme designed to leverage investment in long-term energy storage capacity, which will operate as a ‘cap-and-floor’ mechanism.

What is the future of energy storage?

“The Future of Energy Storage,” a new multidisciplinary report from the MIT Energy Initiative (MITEI), urges government investment in sophisticated analytical tools for planning, operation, and regulation of electricity systems in order to deploy and use storage efficiently.

Why is energy storage important?

As the report details, energy storage is a key component in making renewable energy sources, like wind and solar, financially and logistically viable at the scales needed to decarbonize our power grid and combat climate change.

How will the new energy storage scheme work?

The new energy storage scheme will include a cap on the revenues of project owners, forcing them to share some or all profits above a set threshold, while a minimum floor price will guarantee certain revenues for operators.

How will storage technology affect electricity systems?

Because storage technologies will have the ability to substitute for or complement essentially all other elements of a power system, including generation, transmission, and demand response, these tools will be critical to electricity system designers, operators, and regulators in the future.

Is energy storage a barrier to investment?

Until now energy storage has often been viewed as having high upfront costs despite low operational expenses, which has been a barrier to investment. The UK’s National Electricity System Operator estimates that a total of 11.5 GW to 15.3 GW of so-called ‘long duration’ energy storage will be required by 2050 to achieve net zero.