Battery Storage Gains Ground in UK’s T-4 Capacity Market Auction

March 15, 2025

The latest T-4 Capacity Market Auction has awarded long-term contracts to a range of battery energy storage systems (BESS), reinforcing the critical role of storage in supporting the UK’s electricity grid. Over 1.8 GW of de-rated BESS capacity secured agreements, nearly doubling last year’s allocation of approximately 1 GW. This growth reflects the increasing importance of energy storage in balancing renewable generation and maintaining supply security.

Among the projects awarded contracts, major developments include Fidra Energy’s 1.4 GW Thorpe Marsh and 500 MW West Burton C, alongside several other grid-scale battery storage initiatives. Additionally, longer-duration storage is gaining traction, with 404 MW of 4-hour, 189 MW of 5-hour, 31 MW of 6-hour, and nearly 240 MW of 8-hour projects securing contracts. This shift highlights the need for more sustained energy storage solutions to support grid reliability.

The Capacity Market provides financial incentives for energy projects that contribute to grid stability. This year’s auction, clearing at £60/kW/year, marks a slight decrease from last year’s £65/kW/year but demonstrates continued investment in energy storage as part of the UK’s transition to low-carbon electricity generation. Meanwhile, gas-fired generation saw a marginal decline, with 27.3 GW awarded compared to 28.7 GW in the previous auction, further indicating the shift towards renewable and storage technologies.

Battery storage sites, including those within sustainable energy parks, will play a key role in securing future energy supply. The final confirmation of the auction results is expected from the Secretary of State for Energy Security and Net Zero by 24th March.

#BatteryStorage #EnergyTransition #GridStability #RenewableEnergy #SustainableFuture