MESH Compressed Air Storage: UK’s Largest LDES Plan
The AIM-listed developer says its MESH compressed air project, planned in offshore salt caverns off Lancashire, has completed pre-FEED, appointed Jacobs for consenting and will enter Ofgem’s next cap and floor round.
October 1, 2026 — EnergyPathways plc said that its Marram energy storage hub (MESH) compressed air project, planned off the Lancashire coast, has completed pre-FEED. The 300MW/55GWh facility carries an estimated £450-500 million capex, a targeted 2028 final investment decision and commercial operations from 2031/32, subject to approvals and financing.
Key Takeaways
- EnergyPathways plc announced on 29 September 2026 that pre-FEED is complete for the compressed air energy storage (CAES) element of its Marram energy storage hub (MESH), which it describes as the UK’s largest long duration energy storage (LDES) facility at 300MW/55GWh.
- The company estimates the CAES project will cost £450-500 million, reach final investment decision in 2028 and begin commercial operations in 2031/32, subject to FEED, government approvals, definitive financing and offtake agreements.
- The project was designated one of ‘National Significance’ by the UK Government in September 2025, which EnergyPathways says compresses consenting that would normally take several years into an 18-24 month timeframe under a Development Consent Order.
- EnergyPathways estimates capex of £8,000-£11,000 per MWh of storage capacity, against circa £22,000-£200,000 per MWh for lithium-ion, flow battery and pumped hydro projects; these are company estimates and are unverified.
- The company plans to enter Ofgem’s cap and floor round, due to launch in Q4 2026, and the £28 million Ultra-LDES Challenge grant fund run by UKRI through Innovate UK with DESNZ.
What EnergyPathways Announced for its Compressed Air Project
EnergyPathways plc said that it has completed pre-FEED on the long duration energy storage element of the Marram energy storage hub (MESH). The company is developing the hub in the East Irish Sea and Barrow-in-Furness, with the storage facility located circa 11 miles off the Lancashire coast, according to the announcement. The company says the compressed air energy storage (CAES) facility will have 300MW of power and 55GWh of storage capacity, making it the UK’s largest LDES facility. The announcement gives the duration as 190 hours of storage and discharge capability in one passage and as ‘100+ hours’ in another; see editorial flags. The company has appointed Jacobs, an engineering and consenting consultancy, as lead contractor for the Development Consent Order (DCO) process and for the upcoming Ofgem cap and floor round. The company states the project will store surplus electricity as compressed air in four offshore salt caverns, each equivalent in size to four St Paul’s Cathedrals.
How the Diabatic CAES Design Works
According to EnergyPathways, the project will use proven diabatic compressed air technology, storing surplus electricity as compressed air in salt caverns and releasing it to generate power when needed. The company says several similar projects operate in Europe, the USA and China, though it does not name them. It also says the facility could be operated interchangeably as a gas and hydrogen power generator, allowing it to optimise the value of its finite stored air. Separately, the company says it has filed patent applications covering technology to store the heat created during the compression phase in sub-surface salt caverns and release it later to improve efficiency during generation. The company says it would seek to license these innovations once patents are granted. The patents are applications only and have not been granted.
Timeline, Capex and Projected Economics
EnergyPathways estimates capex for the compressed air project at £450 million to £500 million, with a final investment decision (FID) in 2028 and commercial operations from 2031/32, according to its 29 September 2026 announcement. All figures are subject to FEED, government approvals, definitive financing and offtake agreements. The company says the asset would have a life and continuous operation in excess of 30 years with no capacity degradation, a comparison it draws with batteries. Its scoping economics indicate annual revenues of £100 million to £200 million, annual EBITDA of £40 million to £120 million and an NPV8 of £300 million to £500 million. The company expects revenue from the balancing market, capacity market, wholesale power markets, and ancillary services such as inertia and voltage support.
Cost per MWh Vs Other Storage Technologies
EnergyPathways estimates capex per unit of storage capacity at £8,000 to £11,000 per MWh, citing salt cavern economies of scale, re-use of existing energy infrastructure and a shallow-water operating environment. The company says other storage projects, including lithium-ion batteries, flow batteries and pumped hydro, have capex of circa £22,000 to £200,000 per MWh. The announcement does not name an independent source for the comparison range, so it should be treated as the company’s own estimate.
Consenting, Grid and Policy Route
The project was designated one of ‘National Significance’ by the UK Government in September 2025, according to EnergyPathways. The company says this gives access to single window clearance on permits, consents and licences, compressing processes that would normally take several years into an 18-24 month timeframe, with the Secretary of State ultimately able to grant a DCO. The company says it is in talks with the National Energy System Operator (NESO) on grid connection options, with DESNZ on policy and with Ofgem on the cap and floor process. It cites the project’s position relative to the B6 and B7a constraint boundaries as suitable for capturing surplus generation. The company says it will take part in Ofgem’s next cap and floor round, due to launch in Q4 2026, which it says underpins revenues with a UK sovereign guarantee. It will also participate in the Ultra-LDES Challenge, a £28 million grant fund for projects delivering over 100 hours of storage, run by UK Research and Innovation through Innovate UK in partnership with DESNZ. The company says LDES is an investment priority for GB Energy and the National Wealth Fund and expects MESH to be attractive to them.
The System Problem the Project Targets
EnergyPathways says surplus wind power is costing the taxpayer circa £1.5 billion a year in curtailment costs today, rising to circa £8 billion or more by 2030, citing UK Government estimates without naming the underlying publication. It also says the Government estimates potential savings from LDES of £24 billion to £50 billion from 2030 to 2050. The company says UK system surpluses could reach as much as 70 TWh per year. During high demand or low wind and solar output, it says NESO typically calls on peaking gas plants or combined cycle gas turbines (CCGTs), which set the marginal price of electricity. The company says it estimates MESH could release stored power at prices lower than CCGTs, batteries and pumped hydro.
Next Milestones, Financing and Management Comment
The company lists key milestones for the coming months: launching and submitting to the cap-and-floor mechanism, finalizing grid connection arrangements, starting FEED, and completing financing and offtake agreements. It says it has begun conversations with banks, institutional investors and strategic industry players. The company agreed to a three-year £5 million convertible loan note and a £10 million at-the-market facility in April 2026. It drew £2 million under the loan note and converted £500,000 into ordinary shares. The company estimates total development expenditure and capital expenditure for all three MESH projects at £1.02 billion to £1.20 billion. The compressed air project is one of the three.
Ben Clube, EnergyPathways’ CEO, commented:
“We are now entering a critical phase in the lifecycle of all three projects. Engineering, regulatory and financing workstreams are being progressed at pace with the team, along with the Company’s external advisors engaging deeply and constructively with multiple stakeholders. I believe that we are on the cusp of significant development milestones for each project coming to fruition and look forward to making these announcements when they have been achieved.”Source: EnergyPathways
Energy Market Analyst specializing in global energy markets, pricing trends, market intelligence, and the transition toward cleaner energy systems. Passionate about analyzing data, identifying emerging opportunities, and turning complex market developments into actionable insights for businesses and investors.
