The Secretary of State for Energy Security and Net Zero, Ed Miliband, has issued a letter to the Electricity System Operator detailing the parameters for the forthcoming Capacity Market auctions.
The letter outlines the requirements for the T-1 auction for the 2025-2026 delivery year and the T-4 auction for the 2028-2029 delivery year.
The parameters include the volume of capacity to be secured and de-rating factors for interconnections.
For the T-1 auction, a target capacity of 6.5GW has been set, which is a reduction from the initially recommended 6.8GW.
For the T-4 auction, the target capacity is 45GW, with 1GW set aside for the associated T-1 auction, resulting in a procurement target of 44GW.
The letter also indicates that the parameters for the auctions may be updated following pre-qualification and will be confirmed before the auctions take place in early 2025.
In addition, the letter references the ongoing consultations aimed at improving the security of supply and aligning the Capacity Market with the government’s net zero goals.
Feedback from industry stakeholders and representative bodies has been considered in setting these parameters.
The government has also completed a consultation on Capacity Market reforms, which aimed to boost supply security and align with net zero goals.
The government said the changes will be made through amendments to the Capacity Market Rules 2014 rather than the Electricity Capacity Regulations 2014, including allowing mothballed plants and batteries to participate in auctions.
