The National Energy System Operator (NESO) has released the provisional T-4 Capacity Market Auction results for delivery in 2028/2029.
The T-4 auction concluded yesterday (11 March) at 11:30am, and 43.1GW was procured across 669 Capacity Market Units (CMUs). The auction cleared at a price of ?60/kW/year, down from last year’s all time high clearing price of ?65/kW/year.
Around 18.861MW of capacity was awarded for solar generators, across 12 market units, while 111 battery energy storage system (BESS) CMUs were awarded a total of 1.782GW of capacity. BESS represents 16.59% of all the total awarded capacity in this auction. Pumped storage was awarded 3.77% of the total capacity granted in this T-4 round, at 1.623GW across eight CMUs. Meanwhile, 17 BESS CMUs, representing 182MW of capacity, exited the market in this auction round.
Of the existing generating CMUs for energy storage assets, 21MW of capacity was awarded to 1-hour assets, 4.4MW was awarded to 2-hour assets, 2.23GW was awarded to a 12-hour pumped hydro storage project from Drax across two CMUs, while 1.4GW was awarded to a 9-hour duration storage project.
For new build generation CMUs, 0.785MW of capacity was procured for 1-hour assets, 80.7MW was procured for 1.5-hour assets, while 781MW – a total of 1.82% of all capacity procured – was procured for 2-hour assets. Longer duration storage projects are making an increasingly large dent in capacity market auctions, with a total of 404MW of capacity secured for 4-hour duration projects, 189MW secured for 5-hour duration projects, 31MW secured for 6-hour projects, and almost 240MW secured for 8-hour duration projects.
Spotlight on Fidra Energy
One of the major successes in this year’s T-4 auction came for Fidra Energy, which secured 15-year awards for its 1.4GW Thorpe Marsh and 500MW West Burton C BESS projects. Both of these projects are expected to become operational in 2027; once operational, the Thorpe Marsh project will be the UK’s largest battery project.
Chris Elder, Fidra Energy’s chief executive officer, said: “The Capacity Market Auction is a key part of the UK’s energy market and the revenue certainties it provides give renewable generation and storage companies the confidence to invest in the UK market. Securing a record-breaking capacity market award for new build battery energy storage projects is a proud moment for us, and a testament to the strength of the UK’s BESS market.”
Walid Mouawad, managing director and co-head of energy transition at institutional investor EIG, which provides financing for Fidra Energy, added: “Fidra’s success in the Capacity Market Auction is a testament to the growing role of large-scale battery storage in the UK’s energy transition.
“These projects will provide critical flexibility to the grid, ensuring a stable and reliable power supply as renewable generation expands. EIG is proud to support the development of these transformative assets, reinforcing our commitment to advancing the UK’s clean energy future.”
