Government reviews emerging Capacity Market technologies

The Department for Energy Security and Net Zero has completed its 2026 review of emerging electricity generation technologies seeking recognition within Great Britain’s Capacity Market, identifying further technical assessment requirements for deep geothermal generation, ammonia-to-power systems and offshore hybrid assets.

The government published its response on 5 November after receiving three submissions to an annual evidence-gathering exercise opened on 2 September. The submissions considered technologies that could contribute to electricity security of supply but whose operating characteristics may not be adequately represented by existing Generating Technology Classes.

No new classification or eligibility arrangement has been introduced. DESNZ will continue examining the technologies alongside the National Energy System Operator, known as NESO, and Ofgem, with further work needed to establish whether existing categories are suitable or additional provisions should be developed.

Great Britain’s Capacity Market secures commitments from eligible electricity resources to provide capacity during periods when the electricity system may experience a supply shortage. Participants compete for capacity agreements, which establish obligations and associated payments subject to the relevant market rules.

The assessment of dependable capacity differs from an installation’s nameplate generating rating. A power station may be capable of producing a specified maximum electrical output, but its contribution to security of supply depends on the likelihood that it can deliver electricity during periods of system stress.

Generating Technology Classes provide a framework for assessing the characteristics of different types of equipment. De-rating factors are used to reflect their expected contribution to electricity security, allowing the market to distinguish nominal capacity from the quantity regarded as dependable under the relevant methodology.

Deep geothermal electricity generation was among the technologies examined. A respondent provided updated evidence drawing on operational developments at United Downs in Cornwall, where heat recovered from deep underground resources is used to support electricity generation.

Geothermal electricity production differs from conventional hydropower, which converts the energy of moving or elevated water into electricity. A geothermal installation instead uses heat from underground fluids to operate an electricity generation cycle, with its output dependent on resource conditions and the configuration of the associated equipment.

The government confirmed that geothermal generation is excluded from the existing Hydro Generating Technology Class. However, it has not concluded that every geothermal installation necessarily requires a new class, because eligibility may depend on the particular generating system.

A facility producing both electricity and useful heat could require consideration against the Combined Heat and Power classification. Such an assessment would need to examine the complete operating configuration, including how electricity production interacts with heat supply requirements.

Geothermal generating performance depends on factors including resource temperature, fluid flow, heat extraction equipment and conversion efficiency. Where an installation supplies electricity and heat, changing thermal demand may also influence the amount of electrical power available at particular times.

The government’s response identifies limited operational evidence as a constraint on establishing a dedicated geothermal classification. Early experience at one installation does not necessarily provide a sufficiently representative basis for determining how similar plants would perform during electricity system stress.

Further evidence would be needed to establish an appropriate de-rating factor if a new geothermal class were considered necessary. That work would have to account for dependable generating output, maintenance availability and the operating conditions affecting the conversion of geothermal heat into electricity.

Ammonia-to-power was the second technology addressed. The submission examined systems that use ammonia directly as a fuel in suitable gas turbines or engines, alongside configurations that convert ammonia into hydrogen before electricity generation.

Direct ammonia combustion and ammonia cracking introduce different technical requirements. Combustion equipment must accommodate the fuel’s characteristics and relevant emissions controls, while cracking systems require additional processing equipment to produce hydrogen for use in a turbine, engine or fuel cell.

The availability of stored fuel could allow ammonia-based installations to provide dispatchable electricity without relying on continuous hydrogen pipeline deliveries. The submission identified established ammonia supply chains, bulk storage facilities and port infrastructure as potential advantages.

Fuel availability does not establish electrical availability on its own. Generating equipment must also be capable of starting and operating when required, with the complete installation’s performance affected by fuel preparation, conversion efficiency, maintenance and equipment operating limits.

The respondent suggested that some ammonia-to-power configurations could qualify under existing gas or fuelled generation classes. Others may require separate consideration where their operating characteristics do not fit the established categories.

DESNZ has already undertaken separate policy work concerning hydrogen-to-power generation and interconnectors, publishing a response to that evidence-gathering process in May 2026. Any consequences for ammonia-to-power will need separate assessment rather than automatic application of the hydrogen arrangements.

Offshore Hybrid Assets formed the third area considered. These include Multi-Purpose Interconnectors and Non-Standard Interconnectors associated with offshore wind generation, combining electricity transmission between countries with connections for offshore generating assets.

The electrical function differs from that of a conventional point-to-point interconnector. A hybrid system may need to accommodate cross-border transfers while also receiving output from connected wind farms, creating operating conditions that depend on both electricity markets and the availability of offshore generation.

LionLink and Nautilus remain important examples of the emerging configuration, while GriffinLink has been proposed as a further connection between Great Britain and Germany. The government also noted Ofgem’s previous decisions concerning regulatory parameters for the LionLink and Nautilus pilot projects.

The treatment of these assets within the Capacity Market raises questions about the quantity of dependable import capacity available during periods of system stress. Transfer capability may depend on wind generation, conditions on neighbouring networks and the technical limits of the interconnector itself.

Although the methodology for determining interconnector de-rating factors was updated ahead of 2026 Capacity Market prequalification, DESNZ confirmed that further consideration is required before offshore hybrid assets can be fully accommodated within the framework.

The government will continue evaluating technical feasibility, classification and possible regulatory changes with NESO and Ofgem. Its next annual invitation for evidence is scheduled for autumn 2027, providing another opportunity to assess technologies whose performance and operating arrangements are not yet sufficiently established.

Any future changes will require dependable evidence of the capacity that qualifying installations can provide during system stress. The latest review leaves the existing framework unchanged while identifying the technical information needed to assess the three emerging generation and transmission configurations.