IN Brief:
- The 2027 T-1 Capacity Market auction will target 5GW.
- The parallel T-4 auction will seek 40.9GW for 2030–31.
- Batteries, interconnectors, demand response, and conventional generation may compete.
The Department for Energy Security and Net Zero has set procurement targets of 5GW and 40.9GW for Great Britain’s Capacity Market auctions scheduled for March 2027.
While the T-1 auction will procure capacity for the 2027–28 delivery year, the T-4 round will secure resources for 2030–31. The combined target is 45.9GW, although the volume ultimately awarded will depend on clearing prices and the demand curves applied in each auction.
The T-1 target has a minimum capacity of 4GW and a maximum of 6GW at a zero clearing price. For T-4, the demand curve ranges from 39.4GW to 42.4GW around the central target of 40.9GW.
A gross T-4 requirement of 41.4GW was calculated before 500MW was reserved for procurement through the later T-1 auction covering the same delivery year. The calculations use the government’s reliability standard of three hours of expected loss of load per year.
Net cost of new entry has been set at £49/kW a year, with an auction price cap of £75/kW a year and a price-taker threshold of £25/kW a year. Capital-expenditure thresholds will determine eligibility for multi-year agreements lasting three, nine, or 15 years.
Different technologies compete for adequacy
Conventional generation, battery storage, demand-side response, and eligible interconnectors may all compete, subject to qualification and technology-specific de-rating. Each resource receives credit for the proportion of its nameplate capacity expected to remain available during a system stress event.
Interconnector de-rating factors for the T-4 auction range from 49% for Moyle to 71% for Nemo Link. IFA is rated at 55%, IFA2 at 57%, ElecLink at 60%, BritNed at 57%, Greenlink at 61%, North Sea Link at 68%, Viking Link at 67%, and NeuConnect at 66%.
Battery de-rating is closely linked to duration because an asset must sustain output throughout a stress period. Short-duration systems can respond quickly but receive less accredited capacity than longer-duration assets with the same power rating.
State-of-charge management before and during system stress therefore becomes central to a battery’s Capacity Market value. Commercial operation in wholesale and ancillary-service markets must be coordinated with the obligation to remain available when instructed.
Demand response can provide capacity without constructing a conventional generating station, although delivery depends on customers being able to reduce or shift consumption at the required time. Baseline calculations, metering, communications, notification periods, and testing determine whether contracted reductions can be relied upon.
Capacity margins remain operationally important
The 2026 auctions procured 7.2GW through T-1 and 40.2GW through T-4, including 576MW and 1,224MW respectively from battery storage. The lower 2027 T-1 target reflects a different assessment of requirements and capacity already secured for the delivery year.
Contracted capacity does not guarantee that every asset will be available during every tight period. Plant outages, fuel availability, network constraints, interconnector conditions, and battery state of charge can alter the resources available to the control room.
That operational uncertainty was visible when NESO issued its first summer electricity margin notice during a period shaped by low wind, generator availability, interconnector flows, and sustained demand.
By 2030–31, the generation mix will contain more wind, solar, storage, and interconnection, while some existing thermal capacity may have retired or reduced its operating hours. Adequacy planning must therefore assess whether the procured portfolio can perform through prolonged or repeated periods of system stress.
Auction parameters also influence investment decisions several years before delivery. New generation and storage projects combine expected Capacity Market income with wholesale, balancing, and ancillary-service revenue when seeking finance.
Qualification will determine the final field before the March auctions, while the clearing results will show how much capacity is provided by existing assets, new construction, storage, demand response, and cross-border connections. The outcome will provide an updated view of Britain’s resource mix approaching 2030.
