Delivering reliability for GB consumers: the Capacity Market in action

Britain’s electricity system depends on a diverse mix of resources to keep the lights on during periods of highest demand. Established in 2014, the Capacity Market provides long‑term, stable revenue to Capacity Providers in return for guaranteeing their availability during system stress events. This ensures that reliable capacity is in place when it is needed most and helps protect consumers from the risks and costs associated with supply shortfalls.

Each year, the Capacity Market plays a central role in securing the capacity needed to maintain security of supply as the system evolves with growing renewable generation and shifting patterns of use.

NESO has served as the Delivery Body for the Capacity Market since its inception. We manage the full front‑end process for the annual T‑1 and T‑4 Auctions, including overseeing Prequalification, assessing Applications, resolving Disputes, supporting Applicants through training and mock Auctions, and operating the Auction platform during the live rounds. Once the CM Agreements are awarded, we are also responsible for continuous CM Agreement management to ensure capacity providers comply with their obligations. 

T‑1 Capacity Auction Results

The T 1 Capacity Market Auction concluded on 4 March 2026 at a Clearing Price of £5/kW/year, the lowest level in five years. In total, 7.2 GW was procured, topping up the 50.7 GW already secured for delivery in 2026/27 and providing targeted additional capacity to support system resilience and consumer value.

The T‑1 Auction attracted a broad mix of technologies as the energy system continues to transition. Gas‑fired generation remains essential in providing dispatchable flexibility, while nuclear continues to deliver reliable, low‑carbon baseload during periods of low wind and solar output. Non‑fossil fuel capacity accounted for 70.8% (5.1 GW) of awarded capacity, driven primarily by nuclear alongside growing participation from demand side response and battery storage, supporting the aims of Clean Power 2030. The remaining 29.2% (2.1 GW), mainly gas, reflects its ongoing role in maintaining security of supply.

T‑4 Capacity Auction Results

The T‑4 Auction concluded on 11 March 2026 with a Clearing Price of £27.10/kW/year, a marked reduction compared with the £60–£65 range seen in the previous three T‑4 Auctions. A total of 40.1 GW was procured for delivery in 2029/30, with a further 2.9 GW secured for delivery beyond 2029/30.

The Capacity Market supports security of supply by enabling continued operation and investment in existing generation, including significant refurbishment of critical assets. The T-4 awarded 23.5 GW of gas-fired capacity, reflecting the continued system need for firm, flexible and dispatchable generation to main security of supply. Gas-fired capacity continues to play an important role in supporting system reliability and providing security of supply during as the electricity system transitions

Alongside maintaining security of supply, the results also support clean energy objectives and continued progress towards the CP2030 Action Plan, with 8.2 GW accounting for non-fossil fuel capacity.  

What’s Next?

NESO now moves into the next phase of delivery, ensuring CM Agreements are issued and Capacity Providers are supported through future milestones.