On 11 December 2024, the Electricity Market Reform (EMR) Delivery Body published the first Capacity Market Register for the T-1 2025/26. The register includes the details of all the units that prequalified, opted out, or were rejected ahead of the latest auction.
With prices in the T-1 Capacity Market falling since the 2022/23 delivery year, what could these early results indicate about this auction’s clearing price?
9.8 GW of de-rated capacity has pre-qualified for the 2025/26 T-1 Capacity Market auction
16.6 GW of connection capacity has been prequalified for the T-1 2025/26 Capacity Market auction. This is equivalent to 9.8 GW of de-rated capacity.
Of the 9.8 GW that is prequalified, 1.3 GW is conditionally prequalified. This means the unit is prequalified subject to fulfilling one or more conditions before the Auction. More specifically, the applicant needs to lodge credit cover, submit Relevant Planning Consents, or both.
On the other hand, looking at connection capacity, 1.6 GW of capacity has opted out from the auction. This is mainly from the Drax coal plant (1.3 GW), which stopped generating in 2023, and Corby CCGT (292 MW), as it will be closed down, decommissioned, or otherwise non-operational by the start of the 2025/26 delivery year.
Record-breaking nuclear capacity has prequalified for the T-1 Capacity Market
Nuclear units make up the largest prequalified capacity by technology type, with 4.8 GW connection capacity and 3.6 GW de-rated. Nuclear first appeared in a T-1 auction for the 2023/24 delivery year. 1.8 GW of connection capacity was prequalified. The T-1 2025/26 Capacity Market marks nuclear’s highest prequalified capacity.
The four plants, Torness, Heysham 1&2, and Hartlepool - all owned by EDF Energy - who recently reported it will extend their operational life. Torness and Heysham 2 will continue generating for an extra two years until 2030. While, Hartlepool and Heysham 1 will continue to 2027 - an extra year.
Despite batteries having the second-highest connection capacity among the technologies, their de-rating factors mean they were only the fourth highest by de-rated capacity.
T-1 2025/26 Capacity Market prequalified capacity is over target by 3.3 GW
The National Energy System Operator (NESO) has a target to acquire 6.5 GW of capacity for the T-1 2025/26 Capacity Market. This means at 9.8 GW, the combined prequalified and conditionally prequalified capacity is 3.3 GW above the target.
If prices fall to £0/kW (which requires 7.5 GW or more to remain in the auction) the auction will not clear, and no agreements will be given. However, based on historic auctions, this outcome is unlikely.
T-1 2025/26 Capacity Market sees the highest excess prequalified capacity in five years
Excess prequalified capacity in the T-1 auction has been growing since the 2022/23 delivery year. The 2025/26 T-1 is the highest excess since the 2020/21 delivery year, where the target was just 300 MW.