Battery storage awarded 576 MW in UK top-up capacity market auction

BESS secured 8% of awarded capacity for delivery in 2026-27 in the UK T-1 capacity market auction, according to provisional results from grid operator NESO.

The auction awarded 7.2 GW of capacity agreements at a clearing price of GBP 5 ($7) per kW, per year – the lowest level for a T-1 auction since 2020. Awarded capacity was spread across 195 units, including 51 capacity market units (CMU) with “storage – battery” listed as the primary fuel type.

First held in 2014, UK capacity market auctions are split between a T-1 “top-up” auction and the longer-term T-4 auction, which awards multi-year capacity agreements four years ahead of delivery.

The T-1 auction provides grid operator NESO with an opportunity to plug any gaps in capacity reserve not covered by the contracts awarded at previous T-4 auctions. For 2026-27, the 7.2 GW secured in the T-1 is in addition to 50.7 GW awarded at previous T-4 auctions, according to NESO.

For BESS assets and other technologies, T-1 auctions offer an opportunity to secure additional contracted revenue at relatively short notice.

Bertalan Gyenes, consultant at LCP Delta, told ESS News that in many cases, new build capacity seeking contracts in T-1 auctions may have already secured capacity agreements for the following year under a T-4 auction, but have managed to commission ahead of schedule. “That seems to have happened this year,” said Gyenes. “There’s quite a lot of batteries and some bigger gas reciprocating engines that did that.”

Demand-side response (DSR) assets have also performed well, edging ahead of BESS to secure 662 MW of awarded capacity. DSR assets competing in T-1 can include large industrial offtakers with as well as aggregators, such as utilities with a fleet of EV chargers that operate flexibly.

Nuclear secured most capacity in the 2026 T-1 auction, supported by the decision to extend the operating life of EDF’s Hartlepool and Heysham plants until 2028.

Prices have been on a downward trend in Great Britain’s T-1 auction for half a decade, with the GBP 45 per kW per year clearing price for delivery year 2021-22 descending to GBP 20 per kW per year for the 2025-26 delivery year. The 2020-21 T-1 auction had a clearing price of GBP 1 per kW, per year.

T-4 auction prices should be less volatile given the significantly greater volume of capacity being procured. The T-4 auction for delivery in 2029-30 will have an auction target of 39.4 GW of capacity and will offer multi-year contracts, providing BESS asset owners with the kind of guaranteed future revenue that can support project financing.

The announced results T-1 are provisional and will become final following an eight working day post‑auction period and government sign‑off.  Contracts awarded at T-1 auctions for a delivery year spanning Oct. 1 to Sept. 30.