I think in this case it's because LDES can't compete in the UK energy market, but it's a capability that needs to be developed, so this scheme address that by providing a guaranteed revenue.
The floor is a minimum revenue guarantee, to protect investors at times when the wholesale price is low and the cap is a maximum revenue limit to protect consumers when the wholesasle price is high.
It seems like these limits haven't been set yet, so I don't know what the potential impacts on energy prices will be.
Government picking winners?
When did that ever work out well?