On 11 December 2024, the Electricity Market Reform (EMR) Delivery Body published the first Capacity Market Register for the T-4 2028/29. The register includes the details of all the units that prequalified, opted out, or were rejected ahead of the latest auction.
The past two auctions cleared at record-high prices. So how far are the early conditions of this auction comparable?
48.7 GW of de-rated capacity has prequalified for the T-4 2028/29 Capacity Market auction
A total of 70 GW of connection capacity has been prequalified or conditionally prequalified for the T-4 2028/29 Capacity Market auction. This is equivalent to a de-rated capacity of 48.7 GW.
Conditionally prequalified 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.
10.7 GW of connection capacity has opted out of the auction. This is mostly driven by nuclear and coal plants. The Hartlepool (1.2 GW) and Heysham 1 (1.2 GW) nuclear plants are scheduled for decommissioning in 2027. Despite receiving an extension to 2030, EDF Energy has also opted Heysham 2 (1.2 GW) and Torness (1.2 GW) out of the auction. EDF Energy has opted these units into the T-1 auction for the 2025/26 delivery year, so it's likely it may choose to opt them into T-1 auctions for the next delivery years.
Batteries make up the second-largest capacity prequalified for the auction
A total of 14 GW of battery connection capacity has prequalified for the T-4 auction. This means batteries are the second largest technology type prequalified for the auction by connection capacity. A similar capacity was seen in the 2026/27 T-4 prequalification round. 13.8 GW of this capacity comes from new-build projects.
Gas units make up the largest technology type by both connection and de-rated capacity. 31.8 GW of gas connection capacity has prequalified. 4 GW of this comes from existing units that plan to undergo refurbishments. These CCGTs include Severn (850 MW), Sutton Bridge (850 MW), Langage (900 MW) and South Humber (1.4 GW).
Prequalified capacity in the T-4 2028/29 Capacity Market auction exceeds the target by 4.7 GW
The National Energy System Operator (NESO) targeted acquiring 44 GW of capacity for the T-4 2028/29 Capacity Market. At 48.7 GW, the combined prequalified and conditionally prequalified capacity is 4.7 GW above the target.
88% of the prequalified de-rated battery capacity is conditionally prequalified, the highest proportion seen. In the past three T-4 auctions, 44% of conditionally prequalified battery capacity entered the final auction. At 3.7 GW, if these units do not fully prequalify by the start of the auction, they could make the margin much tighter, leading to a higher clearing price.
95% of initially prequalified capacity goes on to enter the auction in the T-4 Capacity Market
Looking at the combination of prequalified and conditionally prequalified capacity across the past seven auctions, 95% of this capacity goes on to enter the auction. This means 46 GW of capacity is likely to enter the auction in February.
However, for batteries, the proportion of prequalified capacity from the start of the prequalification round that goes on to enter the auction is much lower. In the past three auctions, just 50% of prequalified and conditionally prequalified de-rated capacity has gone on to enter the auction. This is compared to 91% for the T-4 Capacity Market auctions for delivery years 2021/22 - 2024/25.
Historic auctions suggest the T-4 2028/29 could result in a relatively high clearing price
The most recent T-4 auction, for the 2027/28 delivery year, had an excess of 1.5 GW from initially prequalified and conditionally prequalified capacity. By the start of the auction, prequalified capacity was 0.7 GW below target, leading to a record high price of £65/kW.
Prequalified capacity for the 2028/29 auction is between this and the 2026/27 auction where there was an initial excess of 6.7 GW. The 2026/27 auction cleared at £63/kW, the previous record-high.