Outlook for the 2028/29 T-4 and 2025/26 T-1 Capacity Market Auctions

The Capacity Market is a key pillar of GB energy policy, with the annual T-4 and T-1 auctions playing a crucial role in ensuring security of supply in the power system, which has seen a rapid uptake of intermittent capacity over the past decade. The past two years have seen record-high CM clearing prices, due to a combination of higher technology and financing costs, as well as a shrinking pipeline of new-build gas generation.

This year’s 2028/29 T-4 auction is once again expected to be a tight round, as the procurement of new-build capacity will be required to meet the target demand of 43.7 GW (de-rated). A recent upward revision of the procurement target for 2025/26 to 7.5 GW (de-rated) will require new-build capacity to meet demand. Auction participants are also facing an uncertain policy and economic landscape, with key regulations such as the upcoming Connections Reform and the outcome of REMA likely to play a significant role in influencing bidding behaviour.

Key questions to be explored in this session include:

• How do the auction targets and prequalified capacities for the upcoming auctions compare with those of previous years? Which asset classes are likely to play a key role in price formation?
• How do the economics of key dispatchable technology classes stack up presently?
• What are the key non-economic uncertainties that are likely to influence bidding behaviour?
• What is our forecast for clearing prices in the upcoming T-1 and T-4 auctions?
• What is the future outlook for the capacity market in GB, and how do ongoing consultations influence this?

If you have any questions or would like to learn more about our GB services, please feel free to contact Pablo Mayo, our Commercial Associate.