The UK government has set its targets for the next Capacity Market (CM) auctions, due to take place in March 2027, targeting a total of just under 46 GW of capacity for both the T-1 and T-4.
Michael Shanks, Minister of State for Energy, outlined the targets in a letter dated July 14 to Fintan Slye, CEO of the National Energy System Operator (NESO).
The CM purchases capacity to ensure that there is always sufficient supply to meet demand. Winning projects are paid for their availability during specific ‘stress periods’ of the year, regardless of whether they are called upon or not.
The T-1 is purchased for the coming year, so March 2027 will be for 2027-2028, while the T-4 is for four years ahead, so for 2030/31.
Shanks has set a target of 5GW for the T-1. For the T-4, the 41.4GW target for the 2030-31 delivery years means a 40.9GW target for the T-4 auction: the remaining 0.5GW will come from the T-1 taking place for that delivery period.
The T-1 target is lower than it 7.2 GW purchased in the most recent, in March 2026. The T-4 target, meanwhile, is about the same as it 40.2 GW obtained in the most recent T-4.
The CM is mainly participated by fossil fuel generation, including gas and nuclear power, battery energy storage systems (BESS), interconnectors and demand response (DR) programs.
BESS won 576 MW of contracts in the 2026 T-1 and 1,224 MW in the T-4, approximately 8% and 3% of the total purchased capacity respectively.
Solar and wind energy are also eligible for participation, but due to their intermittent and non-dispatchable nature, their derating factors are set very low. The derating is a limitation on the portion of a project’s total capacity that can be bid on, based on how reliable it is perceived to be. It is highest for gas and lowest for intermittent renewable energy sources. Shanks also outlined the derating factors for interconnectors as part of the update.
The full parameters of the auction are in the table below, taken from the Department for Energy Security and Net Zero (DESNZ) website.
