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Capacity Market New Technologies

The government is reforming the Capacity Market to integrate low-carbon and new energy technologies, improving delivery assurance and grid reliability ahead of the 2026 prequalification round. Led by the Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy, the policy addresses how emerging technologies like battery storage and hydrogen can participate in capacity auctions. The reform is active with recent government responses to stakeholder consultation on technology eligibility and operational requirements.

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2025

5 events
2 Dec 2025 | Announcement Department for Energy Security and Net Zero linked

Capacity Market: proposals to integrate low carbon technologies and enhance delivery assurance ahead of Prequalification 2026

UIN: HCWS1117 I am tabling this statement to inform members of the publication of a consultation relating to the Capacity Market (CM) titled ‘Consultation on proposals to integrate low carbon technologies and enhance delivery assurance ahead of Prequalification 2026’ (...

▤ View document · ↗ GOV.UK · ↓
2 Dec 2025 | Announcement Department for Energy Security and Net Zero linked

Capacity Market: proposals to integrate low carbon technologies and enhance delivery assurance ahead of Prequalification 2026

UIN: HLWS1117 My Hon Friend the Minister for Energy, Michael Shanks MP, has today made the following statement:I am tabling this statement to inform members of the publication of a consultation relating to the Capacity Market (CM) titled ‘Consultation on …

▤ View document · ↗ GOV.UK · ↓
21 Nov 2025 | Consultation outcome Department for Energy Security and Net Zero Context · primary home: Electricity Capacity Market R… linked

Capacity Market: new technologies 2025 — outcome published

We're seeking to identify any new emerging generating technologies that may be eligible to participate in capacity market auctions.

▤ View document · ↗ GOV.UK · ↓ Open letter on new technologies in the Capacity…
+1 more
↓ Open letter on new technologies in the Capacity Market, 202…
28 Mar 2025 | Committee report linked

The Department described energy security and the security of supply as its highest priority. We asked the Department what it thought about concerns, set out in a document published by Net Zero Watch called “Blackout Risk in the GB Grid”, that events such as certain weather conditions, or interruption to a few power stations, led to a situation in early January where the level of supply in the grid to meet energy demand fell to what it described as “worryingly low levels”; with a risk of “cutt...

The Department described energy security and the security of supply as its highest priority. We asked the Department what it thought about concerns, set out in a document published by Net Zero Watch called “Blackout Risk in the GB Grid”, …

▤ View document · ↗ GOV.UK

2024

14 events
26 May 2024 | Committee report linked

We noted that renewable energy sources such as solar and wind are determined by the weather, making them intermittent; a view supported by Hydrogen UK. DESNZ recognised that electricity-based heating may change existing patterns in demand for electricity. It said that it therefore needed to make sure the power system can reliably manage peaks and troughs in both supply and demand for electricity throughout the day. DESNZ explained that this was likely to require new low-carbon technologies th...

We noted that renewable energy sources such as solar and wind are determined by the weather, making them intermittent; a view supported by Hydrogen UK. DESNZ recognised that electricity-based heating may change existing patterns in demand for electricity. It said …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

Currently the UK relies on mostly imported gas for electricity system balancing needs. Low carbon long-term energy storage has the potential to reduce the UK’s carbon impact whilst maintaining or improving its levels of energy security.

Currently the UK relies on mostly imported gas for electricity system balancing needs. Low carbon long-term energy storage has the potential to reduce the UK’s carbon impact whilst maintaining or improving its levels of energy security. Type: conclusion | Number: …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

While short-term energy storage has some market drivers, the development of long-term, inter-seasonal storage at the scale expected to be required faces market, policy and regulatory barriers. The UK economy will require a significant level of low carbon energy storage of this type in order to achieve the Government’s net zero energy goals while maintaining energy security and avoiding energy shortfalls.

While short-term energy storage has some market drivers, the development of long-term, inter-seasonal storage at the scale expected to be required faces market, policy and regulatory barriers. The UK economy will require a significant level of low carbon energy storage …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

The Government must address as a matter of urgency the barriers to long term energy storage for the UK to ensure it can provide its citizens with clean and reliable energy during periods of limited renewable generation. This can be delivered through direct Government intervention and investment in infrastructure, as well as through regulatory and policy reforms, such as cap and floor mechanisms or a reformed capacity mechanism, that signal to the market the value of long-term energy storage.

The Government must address as a matter of urgency the barriers to long term energy storage for the UK to ensure it can provide its citizens with clean and reliable energy during periods of limited renewable generation. This can be …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

By the end of 2025 at the latest, the Government must publish an energy storage strategy, underpinned by robust analysis, that indicates to the market the capacity and type of both short-term and long-term energy storage which will be required in a net zero energy system, and the measures that Ministers plan to take to ensure that sufficient capacity is in place to meet the system’s needs in 2035 and in 2050.

By the end of 2025 at the latest, the Government must publish an energy storage strategy, underpinned by robust analysis, that indicates to the market the capacity and type of both short-term and long-term energy storage which will be required …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

The benefits to the energy sector of developing grid flexibility are substantial. These benefits are underpinned and sustained by increased usage of decarbonised consumer technologies such as smart meters, heat pumps and electric vehicles in ways which make best use of the energy supply.

The benefits to the energy sector of developing grid flexibility are substantial. These benefits are underpinned and sustained by increased usage of decarbonised consumer technologies such as smart meters, heat pumps and electric vehicles in ways which make best use …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

The flexibility in the GB energy system provided by the development of demand- side response and energy storage capacity can provide significant cost savings to consumers. But the current slow rate of rollout and take-up of flexible technologies which can benefit from demand-side response is delaying the realisation of these benefits. The Government’s 2035 targets of 600,000 heat pump installations a year and 100% of new cars being zero emission both face real challenges.

The flexibility in the GB energy system provided by the development of demand- side response and energy storage capacity can provide significant cost savings to consumers. But the current slow rate of rollout and take-up of flexible technologies which can …

▤ View document · ↗ GOV.UK
24 May 2024 | Committee report linked

Renewable energy generation paired with sufficient energy storage will allow the UK to become more self-reliant, secure national energy supplies and provide a buffer against energy price hikes. This is a future that the UK should embrace, and that the Government must support actively.

Renewable energy generation paired with sufficient energy storage will allow the UK to become more self-reliant, secure national energy supplies and provide a buffer against energy price hikes. This is a future that the UK should embrace, and that the …

▤ View document · ↗ GOV.UK
5 Mar 2024 | Consultation (closed) Department for Energy Security and Net Zero linked

Long Duration Electricity Storage — consultation closed

Long duration storage (LDES) is a key enabler to a secure, cost-effective and low carbon energy system. LDES can help to decarbonise the system by storing excess renewable generation over longer periods of time (days, weeks, and months), replacing flexibility …

▤ View document · ↗ GOV.UK
9 Jan 2024 | Consultation (closed) Department for Energy Security and Net Zero linked

Long Duration Electricity Storage — consultation opened

Long duration storage (LDES) is a key enabler to a secure, cost-effective and low carbon energy system. LDES can help to decarbonise the system by storing excess renewable generation over longer periods of time (days, weeks, and months), replacing flexibility …

▤ View document · ↗ GOV.UK
9 Jan 2024 | Announcement Department for Energy Security and Net Zero linked

Consultation on Long-Duration Electricity Storage

UIN: HCWS171 Today I am announcing the next steps the Government is taking to create a policy framework to encourage investment in long-duration electricity storage. This delivers on commitments we have made in the British Energy Security Strategy and Powering …

▤ View document · ↗ GOV.UK · ↓

2023

12 events
21 Nov 2023 | Committee report linked

Having secure orders from an anchor customer is critical if battery manufacturers are going to raise sufficient funds to build a gigafactory. Offtake agreements between OEMs and battery manufacturers help signal to investors that there is demand for their product. The Advanced Manufacturing Plan and UK Battery Strategy should set out ways in which the Government could help to facilitate offtake agreements between OEMs and battery manufacturers.

Having secure orders from an anchor customer is critical if battery manufacturers are going to raise sufficient funds to build a gigafactory. Offtake agreements between OEMs and battery manufacturers help signal to investors that there is demand for their product. …

▤ View document · ↗ GOV.UK
21 Nov 2023 | Committee report linked

The UK has potential competitive advantages in new battery technologies. However, despite excelling in innovation, it struggles to ensure that new technologies developed in the UK are commercialised domestically. The UK Battery Strategy must set out how the Government plans to ensure that new battery technologies, where the UK has a competitive advantage, are commercialised in the UK.

The UK has potential competitive advantages in new battery technologies. However, despite excelling in innovation, it struggles to ensure that new technologies developed in the UK are commercialised domestically. The UK Battery Strategy must set out how the Government plans …

▤ View document · ↗ GOV.UK
21 Jun 2023 | Committee report linked

Government’s Net Zero Strategy expects a 40% to 60% increase in electricity demand by 2035 as more modes of transport and heating switch to electricity from fossil fuels.61 The Department told us it is expecting a corresponding increase in electricity generation from roughly 300TWh (a terawatt-hour is a unit of power) today to between 450TWh and 485TWh by 2035.62 Reducing peak electricity demand by encouraging households and businesses to be more efficient and flexible in how and when they us...

Government’s Net Zero Strategy expects a 40% to 60% increase in electricity demand by 2035 as more modes of transport and heating switch to electricity from fossil fuels.61 The Department told us it is expecting a corresponding increase in electricity …

▤ View document · ↗ GOV.UK
28 Apr 2023 | Committee report linked

The deployment of long-duration energy storage is essential to ensuring that a zero- carbon power system can operate 24/7, 365 days a year. These projects are capital intensive and face barriers to deployment due to a lack of long-term market signals. The Government’s 2024 ambition to develop appropriate policy to enable investment in these technologies is welcome, but we are concerned that this has not been made enough of a policy priority.

The deployment of long-duration energy storage is essential to ensuring that a zero- carbon power system can operate 24/7, 365 days a year. These projects are capital intensive and face barriers to deployment due to a lack of long-term market …

▤ View document · ↗ GOV.UK
28 Apr 2023 | Committee report linked

National Grid ESO’s markets for balancing the system and addressing constraints continue to be dominated by fast-acting gas plants. More flexible and responsive low-carbon assets, such as batteries, could lead to greater competition in National Grid ESO’s markets and offer more cost-effective services. We recommend that National Grid ESO opens up its markets to more participants and that it is transparent about the choices it makes when selecting which technologies will be used to balance the...

National Grid ESO’s markets for balancing the system and addressing constraints continue to be dominated by fast-acting gas plants. More flexible and responsive low-carbon assets, such as batteries, could lead to greater competition in National Grid ESO’s markets and offer …

▤ View document · ↗ GOV.UK
28 Apr 2023 | Committee report linked

To build on the success of the Demand Flexibility Service and ensure that demand- side response can become mainstream, the industry needs the opportunity to do more learning by doing. While necessary system reforms take place to create a more enabling environment for demand-side response, we recommend that National Grid ESO and Ofgem work with industry on developing a transitional demand-side response service that can support existing day-to-day balancing services.

To build on the success of the Demand Flexibility Service and ensure that demand- side response can become mainstream, the industry needs the opportunity to do more learning by doing. While necessary system reforms take place to create a more …

▤ View document · ↗ GOV.UK
28 Apr 2023 | Committee report linked

To unlock the potential role that flexibility can play in better synchronising supply and demand, National Grid ESO will need to improve its digital capabilities. We recommend that National Grid ESO speeds up progress on making sure its IT upgrades mean that it can handle flexibility from assets smaller than 1MW and reports to Parliament on its progress in hitting this target.

To unlock the potential role that flexibility can play in better synchronising supply and demand, National Grid ESO will need to improve its digital capabilities. We recommend that National Grid ESO speeds up progress on making sure its IT upgrades …

▤ View document · ↗ GOV.UK

2022

5 events

2021

9 events

2020

5 events
27 Nov 2020 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity market new technologies 2020 — outcome published

We're seeking to identify emerging generating technologies, capable of contributing to security of supply but not already a Generating Technology Class, that may be eligible to participate in capacity market auctions.

▤ View document · ↗ GOV.UK · ↓ Open letter on new technologies in the Capacity…
+1 more
↓ Government response: reply to stakeholders on new technolog…
30 Oct 2020 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity market new technologies 2020 — consultation closed

We're seeking to identify emerging generating technologies, capable of contributing to security of supply but not already a Generating Technology Class, that may be eligible to participate in capacity market auctions.

▤ View document · ↗ GOV.UK · ↓ Open letter on new technologies in the Capacity…
+1 more
↓ Government response: reply to stakeholders on new technolog…
30 Sep 2020 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity market new technologies 2020 — consultation opened

We're seeking to identify emerging generating technologies, capable of contributing to security of supply but not already a Generating Technology Class, that may be eligible to participate in capacity market auctions.

▤ View document · ↗ GOV.UK · ↓ Open letter on new technologies in the Capacity…
+1 more
↓ Government response: reply to stakeholders on new technolog…

2019

1 event

2017

1 event
22 Mar 2017 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity Market: proposals to simplify and improve accessibility in future capacity auctions — outcome published

The method by which Capacity Market (CM) costs are recouped has the potential to give an unfair advantage to small embedded generation including diesel. We are engaging stakeholders on proposed regulatory changes to remove this potential advantage, along with a …

▤ View document · ↗ GOV.UK · ↓ Letter - Capacity Market: proposals to simplify… (6pp)
+4 more
↓ Detailed proposals - Capacity Market: proposals to simplify… (12pp) ↓ Indicative drafting - Capacity Market: proposals to simplif… (17pp) ↓ Consultation response (15pp) ↓ Analytical annex (7pp)

2016

5 events
23 Dec 2016 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity Market: proposals to simplify and improve accessibility in future capacity auctions — consultation closed

The method by which Capacity Market (CM) costs are recouped has the potential to give an unfair advantage to small embedded generation including diesel. We are engaging stakeholders on proposed regulatory changes to remove this potential advantage, along with a …

▤ View document · ↗ GOV.UK · ↓ Letter - Capacity Market: proposals to simplify… (6pp)
+4 more
↓ Detailed proposals - Capacity Market: proposals to simplify… (12pp) ↓ Indicative drafting - Capacity Market: proposals to simplif… (17pp) ↓ Consultation response (15pp) ↓ Analytical annex (7pp)
28 Oct 2016 | Consultation outcome Department for Business, Energy & Industrial Strategy linked

Capacity Market: proposals to simplify and improve accessibility in future capacity auctions — consultation opened

The method by which Capacity Market (CM) costs are recouped has the potential to give an unfair advantage to small embedded generation including diesel. We are engaging stakeholders on proposed regulatory changes to remove this potential advantage, along with a …

▤ View document · ↗ GOV.UK · ↓ Letter - Capacity Market: proposals to simplify… (6pp)
+4 more
↓ Detailed proposals - Capacity Market: proposals to simplify… (12pp) ↓ Indicative drafting - Capacity Market: proposals to simplif… (17pp) ↓ Consultation response (15pp) ↓ Analytical annex (7pp)