Sharpe Pritchard (SP) advised Ofgem on the development of the draft special licence conditions for the UK’s Long Duration Electricity Storage (LDES) cap and floor regime, which was released by Ofgem for early consultation in March 2026. The workstream was led by Steve Gummer (Partner) and Nimoy Kher (Managing Associate) in SP’s Energy and Infrastructure team.
The draft special licence conditions form a central component of Ofgem’s emerging regulatory framework for LDES and are intended to support investment in large‑scale, long‑duration storage technologies while ensuring value for consumers. These technologies will play a critical role in enabling a secure, low-carbon electricity system by supporting the integration of renewable generation, improving system flexibility and resilience, and reducing reliance on fossil‑fuelled balancing services. The cap and floor structure set out in the draft special licence conditions is designed to unlock investment in such technologies that may have otherwise been commercially unviable by providing increased revenue certainty for licensees, while protecting customers from excessive returns.
SP’s advice drew on its deep experience advising regulators and public bodies on the design and implementation of major regulatory and licensing frameworks, supporting Ofgem’s objective of delivering a regime that is robust, proportionate, and capable of accommodating a range of LDES technologies and delivery models. The consultation focuses on the proposed drafting, structure, and operability of the special licence conditions ahead of a planned statutory consultation later in 2026.
