How to minimise the damaging effects of climate change is one of the most significant challenges of our generation. The headlines of the Intergovernmental Panel on Climate Change Sixth Assessment report (Working Group 1: The Physical Science basis) made stark reading: "It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred" and "the scale of recent changes across the climate system as a whole – and the present state of many aspects of the climate system – are unprecedented over many centuries to many thousands of years". The science is clear and the scientists behind this analysis warned that we must all take swift action.

As the UK shifts to a net zero economy, the UK construction industry faces multiple, legal, practical and commercial challenges in making this significant energy transition. We focus on some of those issues in our series of insights below.

If any of the issues raised below affect your business, please get in touch with your usual Dentons contact or one of the contacts listed.

Insights

Balancing consumer, producer and owner interests in the long duration electricity storage cap and floor mechanism

May 28, 2025

United Kingdom: The Cost-Benefit Analysis (CBA) stage of the Long Duration Electricity Storage (LDES) cap and floor mechanism, as outlined in the Technical Decision Document (TDD), introduces a complex dynamic by incorporating socio-economic welfare impacts on other LDES owners.

Consumer protection considerations in the Long Duration Electricity Storage cap and floor mechanism

May 22, 2025

United Kingdom: Ofgem’s cap and floor mechanism for Long Duration Electricity Storage (LDES) aims to balance investor confidence with consumer protections, ensuring that consumers do not bear excessive costs while incentivising energy storage deployment. To safeguard consumer interests, Ofgem will evaluate several key factors, aligning them with its responsibilities for fair pricing, market efficiency and economic sustainability.

The valuation of inertia in Pumped Storage Hydro schemes under the Long Duration Energy Storage cap and floor mechanism

May 15, 2025

United Kingdom: Inertia – the ability of large rotating machinery, such as Pumped Storage Hydro (PSH) turbines, to provide system stability by resisting sudden changes in frequency – is a crucial but difficult-to-value grid benefit. Under Ofgem’s Cost-Benefit Analysis (CBA) framework for Long Duration Energy Storage (LDES), inertia-related benefits are likely to be assessed within the “Other System Impacts” category. However, given the challenges in quantifying inertia’s value, how Ofgem integrates these benefits into decision-making will be key.

View all insights for Energy transition (UK)