The Energy Transition | T-1 Capacity Market auction results published
Published on 11th March 2026
Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero
This week we look at T-1 Capacity Market auction results, applications for the Advanced Nuclear Pipeline, proposals for existing nuclear generation becoming eligible for CfDs, and more.
T-1 Capacity Market auction results - delivery year 26/27
The National Energy System Operator (NESO) has published the provisional results for the T-1 (Target 1) Capacity Market auction - which secures top-up electricity capacity during peak demand periods – for delivery in the winter of 2026/27.
The auction secured 7.2 gigawatts (GW) of capacity, clearing at a price of £5 per kilowatt (KW) per year. NESO reported that the capacity was procured from a broad range of technologies, the largest shares came from nuclear (3.6GW) and gas (2.1GW). Of the total capacity awarded, 54% will be procured from existing generating assets, 22% from new-build generation and 25% from demand-side response.
The auction had a target volume of 6.3GW, with more than 8.3GW of capacity bid into the process. The provisional results became final eight working days from initial publication on 5 March, following sign-off by the secretary of state. Results for the T-4 auction, which covers delivery in 2029/30, are expected to be published in the week commencing 9 March.
UK government publishes consultation response on eligibility of nuclear for CfD
The government has published its response to a consultation on amending the Contracts for Difference (CfD) legislation to make existing nuclear power stations eligible for the scheme.
The consultation, which was launched in December 2025, proposed making existing nuclear assets eligible for a CfD to provide long-term and guaranteed revenue to support the financing of refurbishment, operational commitments and lifetime extensions.
Other low-carbon technologies – including onshore and offshore wind and solar – are currently eligible for a CfD under the scheme. Hinkley Point C, the nuclear plant under construction in Somerset, operates under a bespoke CfD that is designed to incentivise its construction by providing long-term revenue certainty.
The government has confirmed in its response that it will amend the CfD rules to permit eligibility of existing nuclear generation facilities. It argues that the change will support the long-term capital investments needed to allow existing nuclear plants to run as a source of baseload power – the continuous electricity supply on which the grid depends.
The change means that only existing nuclear stations will be eligible for CfDs. The government has also confirmed that any award of a CfD to a nuclear power station would be subject to value-for-money scrutiny before being approved.
The government will now produce draft regulations for Parliament's approval.
NESO takes next step in grid connection reform with 'Gate 2' offers
NESO has begun issuing "Gate 2" offers – formal connection proposals under the reformed grid queue process – to protected transmission and large embedded projects with 2026/2027 connection dates, with all offers for protected projects expected by mid-April 2026.
Protected distribution projects with 2026/2027 connection dates will receive their offers between mid-April and the end of May 2026, later than the early March target originally envisaged.
NESO, at a customer connections webinar on 24 February, emphasised that the Gate 2 offers represent the "best viable option" for projects. Customers will have a fixed acceptance window of 90 calendar days for transmission projects (or as few as 30 days for distribution projects) after which the offer will lapse.
It acknowledged that customers would have questions about their offers and confirmed at the webinar that it will not "stop the clock" on fixed acceptance windows if questions are raised.
The network operator has said its team will respond to questions from a pre-defined list during the fixed acceptance windows to allow developers to make a decision on their offers. Questions raised that are not included on this list will be dealt with individually with no confirmed timeframe for responses. Questions related to distribution projects should be directed to the relevant distribution network operator.
Advanced Nuclear Pipeline opens for project proposals
The Department for Energy Security and Net Zero (DESNZ) has opened the Advanced Nuclear Pipeline (ANP) for developers to submit project proposals when ready to undergo a project readiness assessment (PRA). The launch follows the government's announcement in February of its advanced nuclear framework.
The PRA will be used by DESNZ and Great British Energy-Nuclear to ascertain project maturity using the criteria set out in in the government's guidance document. The government has also published the terms of participation in the ANP, to which projects must accept when submitting a proposal.
Developers seeking additional information or wishing to submit a proposal should contact the Advanced Nuclear Business Engagement Unit at advancednuclear@energysecurity.gov.uk.
UK government consults on Clean Industry Bonus contract changes
DESNZ has opened a consultation on Clean Industry Bonus (CIB) implementation for the Contracts for Difference (CfD) Allocation Round (AR) 8.
This follows publication of a supply chain plan for CfD AR8 and announcement that the CIB will be extended to include onshore wind from CfD AR9.
The consultation also addresses the contractual changes that would be needed if hybrid metering is introduced for AR8; DESNZ's response on this proposal is awaited. Hybrid metering – a combination of single technology and multiple commercial arrangements – would allow developers to meter at the point of generation for sub-balancing mechanism unit calculations rather than requiring separate balancing mechanism units for each CfD project.
This article was written with the assistance of Adam Budd and Oliver Derham, trainee solicitors.
