The T-1 auction held on March 5, 2025, by the UK’s National Energy System Operator (NESO), concluded with the allocation of 7,936.289 MW of capacity across 246 Capacity Market Units (CMUs), surpassing the initial target of 7,500 MW. The clearing price was set at £20/kW/year.
Battery Energy Storage Systems (BESS) stood out with 725.813 MW awarded, distributed across 78 units. This represents 9.15% of the total assigned capacity, further consolidating its role within the UK’s power system.
Beyond the growth of battery storage, the auction results provide key insights into the energy market, the balance between traditional and renewable sources, and the role of flexible demand. It is important to note that these results are provisional and correspond to the 2025/26 delivery period.
The results reflect a diversified market, where traditional technologies such as gas and nuclear generation remain dominant, but renewables and storage solutions are gaining ground.
Breakdown of Awarded Capacity by Technology
The table below shows the distribution of awarded capacity by energy source:
| Technology | Awarded Capacity (MW) | % of Total Awarded |
|---|---|---|
| Nuclear | 3,636 | 45.82% |
| Gas | 2,374 | 29.92% |
| Battery Storage | 725 | 9.15% |
| Demand Side Response (DSR) | 662 | 8.35% |
| Interconnectors | 246 | 3.11% |
| Wind & Solar Combined | 188 | 2.37% |
| Other Sources (Biomass, Waste, Diesel, etc.) | 104 | 1.28% |
Nuclear energy continues to lead, with 45.82% of the awarded capacity, reaffirming its role as a stabilizing force in the energy mix.
Gas remains the second most awarded technology (29.92%), although its share continues to decline compared to previous auctions.
Battery storage has grown significantly, representing 9.15% of the total awarded capacity, surpassing other sources such as solar, wind, and DSR.
Renewables still have a relatively low participation (2.37% for wind and solar combined), but storage is expected to facilitate their integration into the power system.
Emerging Trends in the Energy Market
The T-1 auction results for 2025/26 reveal key changes in the evolution of the UK’s power sector:
1. Growth of Battery Storage: With 725 MW awarded, battery storage continues to solidify its role as a solution to balance renewable intermittency and enhance grid stability. Batteries allow for storing surplus wind and solar energy when generation is high and releasing it during peak demand, ensuring grid reliability.
2. Progressive Decline of Gas: Gas remains a key player with 2,374 MW awarded (29.92%), but its share continues to decline compared to previous auctions. Environmental regulations and the increasing competitiveness of storage and renewables are pushing gas into a more secondary role.
3. Greater Role of Demand-Side Response (DSR): DSR, which enables consumers to reduce or shift their electricity consumption during peak demand, secured 662 MW (8.35%) in awarded capacity. The rise of this technology is crucial for reducing the need for backup generation and improving grid efficiency.
4. Limited Capacity for Renewables: Despite the expansion of wind and solar power in the UK, only 188 MW were awarded in this auction. This is likely because renewables primarily participate in T-4 auctions, which secure longer-term capacity contracts, while T-1 auctions focus on short-term grid stability.
Comparison with Previous Auctions
Battery storage has seen notable growth compared to previous auctions.
In the T-1 auction for 2024/25, the awarded capacity for batteries was significantly lower, highlighting increased interest in this technology and its rising competitiveness in the capacity market.
Another important trend is the evolution of clearing prices in past auctions:
- T-1 2023/24: £18/kW/year
- T-1 2024/25: £22/kW/year
- T-1 2025/26: £20/kW/year
This suggests that prices have remained relatively stable, indicating a sufficient supply of capacity in the short term.
Outlook for Battery Storage in the UK
The T-1 auction results for 2025/26 confirm that battery storage is a key player in the energy transition.
As the UK’s power system moves toward greater electrification and higher renewable penetration, battery storage is expected to continue gaining a larger share in future auctions.
Key factors driving its growth include:
- Increased competitiveness due to cost reductions and technological advancements.
- Regulatory incentives supporting storage integration into the capacity market.
- Expansion of renewable capacity, making storage even more essential for managing intermittency
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