UK Opens £28m Long-Duration Storage Fund as Dorset Hydrogen Hub Awaits Its Cue
Westminster is funding the storage layer of its hydrogen build-out while the flagship Dorset salt cavern project waits on a final investment decision.
The UK government opened a £28 million fund on Friday (2026-08-21) aimed at ultra long-duration energy storage, with the Department for Energy Security and Net Zero and UK Research and Innovation seeking to build a network of technologies capable of discharging for 100-plus hours4. The money is small next to the ambitions attached to it. DESNZ is trying to seed a category of asset — cavern, thermal, gravity, whatever clears the bar — that the country's power system will lean on once intermittent wind and solar take a larger share of generation4.
It matters because the UK's hydrogen and storage plans keep colliding with a financing gap that grant programmes of this size cannot fill. The Dorset project on the former Royal Navy port is the test case. UKEn, a subsidiary of the company behind that hub, struck an agreement in 2022 to lease two sites there and plans an energy hub built around a 1 billion cubic metre hydrogen-ready salt cavern gas storage facility2. Salt caverns are the cheapest bulk hydrogen storage geology Britain has, and the Dorset site sits on one of the few suitable formations in the country.
The storage argument has a second leg. A 1 bcm cavern is not just a hydrogen buffer; it is the physical backbone that lets hydrogen-fired generation run when the wind drops. H2H Easington, the green and blue hydrogen hub on the Humber, is targeting up to 2.2 GW of production through the 2030s, and SSE's proposed Keadby Next Generation Power Station is a 900 MW hydrogen-ready plant designed to provide flexible, low-carbon power as hydrogen supply scales2. Without somewhere to put the molecules, neither the production nor the generation gets built.
That is why the Humber consortium is making noise. The partnership, which includes Equinor, SSE Thermal and Centrica, has taken the lead developer role on the combined pipeline that would transport the hydrogen, according to comments reported on 2026-06-252. The group told Westminster the storage potential in the region is the largest in Britain and argued it offers better value for money than alternatives for team power generation2. Read that as a bid for capital and for a delivery timetable that does not slip.
The storage fund and the Dorset hub are not the same policy instrument, and it would be a mistake to treat the £28 million as a subsidy for salt caverns. The ultra-LDES programme is a research and network-building exercise4. Salt cavern hydrogen storage is a commercial-scale infrastructure problem, and the gap between a grant programme and a final investment decision on a 1 bcm facility is measured in hundreds of millions of pounds, not tens.
Batteries are moving faster. Masdar started commercial operations at a 35 MW battery energy storage system in Rochdale, England, on 2026-08-24, its second start-up toward a 3 GWh UK target5. That is short-duration storage and does a different job, but it shows what gets built when the revenue model is bankable. Long-duration hydrogen storage does not yet have that model.
The government has other storage bets running. It is supporting three large-scale hydro-storage projects as part of a push to diversify the energy mix, a programme that has spent years waiting for a decision3. Hydro pumped storage and hydrogen salt caverns compete for the same system-value argument: both soak up surplus renewable power and both need a mechanism that pays them for standing by.
There is a reason the caution is warranted. Germany has moved ahead on imports, with Uniper seeking customers for a 2.6 million tonne-per-year ammonia-to-hydrogen terminal at Wilhelmshaven that would crack ammonia into around 350,000 tonnes of hydrogen a year and feed the country's 9,000 km core hydrogen network1. Berlin expects imports to meet up to 70% of its 2030 hydrogen demand1. The UK does not have that import strategy at scale. Its hydrogen supply, if it comes, comes from domestic production and domestic storage.
What the Dorset hub needs now is not another grant programme. It needs the transport and storage business model to be settled, demand-side contracts large enough to underwrite the cavern, and a clear signal that hydrogen-fired generation will be paid for the flexibility it offers. The government's 100-hour storage fund is a signal that DESNZ understands the duration problem. Whether it translates into steel in a Dorset salt cavern is a different question, and the answer will show up in the next spending review and in whether H2H Easington's pipeline partners commit capital before the end of the decade.