Mar 13, 2025
Batteries are the primary focus in new construction contracts within the UK's T-4 capacity market auction.
Nearly 1.8 GW of derated battery energy storage capacity in the UK received 15-year capacity market agreements during the T-4 auction on March 11, aimed for delivery in 2028-29. This figure represents more than 80% of the total newbuild agreements in the auction, according to data from the EMR Delivery Body.
The capacity auction, held four years in advance, cleared at a price of GBP60 per kW per year (approximately $84.20 per kW per year). This price is a decline from last year's peak of GBP63 per kW per year for the 2027-28 delivery, but it is still almost double compared to the T-4 auction price in 2022.
The strong clearing price ensured that 15-year agreements were secured for 880 MW of new battery storage units with durations of four hours or more, an increase from 123 MW in the previous year's auction, which included roughly 240 MW for eight-hour systems.
In the auction, four-hour duration batteries were rated at 41.74%, compared to 83.78% for eight-hour duration batteries. This rating indicates the percentage of gross installed capacity deemed reliable by the NESO, suggesting that the actual gross capacity additions from the awarded projects will be significantly higher.
Among the notable awards, 292 MW of derated capacity was assigned to Fidra Energy's Thorpe Marsh site in Yorkshire, which has a total capacity of 1,400 MW (3,100 MWh) and ranks as one of the largest battery energy storage system projects in Europe. Additionally, 104 MW was awarded at its West Burton C BESS project in Nottinghamshire, which has a capacity of 500 MW (1,100 MWh).
In a statement on March 12, Fidra confirmed it had successfully secured 15-year agreements for all its Capacity Market Units that participated in the auction, including for three existing gas units at West Burton B. Fidra Energy's CEO, Chris Elder, stated, "The Capacity Market Auction is a key part of the UK's energy market, and the revenue certainties it provides empower renewable generation and storage companies to invest in the UK market."
Another significant award included 31 MW of long-duration compressed air storage being developed by Highview Energy. This likely pertains to the company’s 50-MW, 300-MWh liquid air energy storage project located in Carrington. Platts has reached out to the company for further comments.
New thermal generation projects were limited to 174 MW of reciprocating engines and 139 MW of energy from waste capacities. Additionally, 309 MW of open-cycle gas capacity withdrew from the auction before clearing, relating to the Corby 2 OCGT project.
Overall, the auction achieved 43 GW of capacity agreements for delivery in 2028-29, with 29.4 GW associated with existing plants, mainly gas-fired. Furthermore, around 6.6 GW of existing interconnection capacity also received support, alongside close to 1.5 GW of unproven demand-side response.
The capacity auction, held four years in advance, cleared at a price of GBP60 per kW per year (approximately $84.20 per kW per year). This price is a decline from last year's peak of GBP63 per kW per year for the 2027-28 delivery, but it is still almost double compared to the T-4 auction price in 2022.
The strong clearing price ensured that 15-year agreements were secured for 880 MW of new battery storage units with durations of four hours or more, an increase from 123 MW in the previous year's auction, which included roughly 240 MW for eight-hour systems.
In the auction, four-hour duration batteries were rated at 41.74%, compared to 83.78% for eight-hour duration batteries. This rating indicates the percentage of gross installed capacity deemed reliable by the NESO, suggesting that the actual gross capacity additions from the awarded projects will be significantly higher.
Among the notable awards, 292 MW of derated capacity was assigned to Fidra Energy's Thorpe Marsh site in Yorkshire, which has a total capacity of 1,400 MW (3,100 MWh) and ranks as one of the largest battery energy storage system projects in Europe. Additionally, 104 MW was awarded at its West Burton C BESS project in Nottinghamshire, which has a capacity of 500 MW (1,100 MWh).
In a statement on March 12, Fidra confirmed it had successfully secured 15-year agreements for all its Capacity Market Units that participated in the auction, including for three existing gas units at West Burton B. Fidra Energy's CEO, Chris Elder, stated, "The Capacity Market Auction is a key part of the UK's energy market, and the revenue certainties it provides empower renewable generation and storage companies to invest in the UK market."
Another significant award included 31 MW of long-duration compressed air storage being developed by Highview Energy. This likely pertains to the company’s 50-MW, 300-MWh liquid air energy storage project located in Carrington. Platts has reached out to the company for further comments.
New thermal generation projects were limited to 174 MW of reciprocating engines and 139 MW of energy from waste capacities. Additionally, 309 MW of open-cycle gas capacity withdrew from the auction before clearing, relating to the Corby 2 OCGT project.
Overall, the auction achieved 43 GW of capacity agreements for delivery in 2028-29, with 29.4 GW associated with existing plants, mainly gas-fired. Furthermore, around 6.6 GW of existing interconnection capacity also received support, alongside close to 1.5 GW of unproven demand-side response.