Consultation outcome

Open letter on new technologies in the Capacity Market, 2023

Updated 30 November 2023

We are consulting with interested parties to determine whether any new generating technologies, which could participate in future Capacity Market auctions, have emerged since we consulted in 2022. 

Rule 2.4 of the Capacity Market Rules requires the Secretary of State to consult with stakeholders by 1 October each year, to determine whether any new generating technologies are capable of contributing to security of supply. Any new technologies, not already identified as a Generating Technology Class, should be eligible to participate in future Capacity Market auctions. This open letter seeks views on whether such new generating technologies exist.  

In response to our consultation last year (opened 28 September 2022), stakeholders provided updates on Vehicle-to-X (V2X, where X could represent the home, a building or the grid) technology and their potential to contribute to security of supply. In response to last year’s consultation, stakeholders provided examples of some commercial V2X operations globally, but acknowledged the difficulties in developing this technology, such as high equipment costs, difficulty entering highly regulated energy systems, and the small number of EVs available to consumers which are V2X enabled.

Earlier this year, government held a funding competition for small scale demonstrations of novel V2X energy technology providing storage and flexible services under Phase 2 of the V2X Innovation Programme. Government also discussed V2X in the electric vehicle smart charging action plan, published January 2023. We would welcome any further views on the progress of V2X technology over the past year and its potential to contribute to security of supply.

One stakeholder proposed the inclusion of Multi-Purpose Interconnectors (MPIs) within the Capacity Market. MPIs, also known as hybrid interconnectors, combine a conventional interconnector linking 2 countries with connections to other offshore generation assets, such as offshore wind. We will continue to consider emerging technologies with the ESO and how best to assess their potential contribution to security of supply and any future participation in the Capacity Market.

Please respond with details of the technology and evidence of its contributions to security of supply to electricity.security@beis.gov.uk by 11pm on 1 November 2023. 

Some examples of the type of information that would support suggestions and aid our decision-making are provided below. Please note that this list is not exhaustive, and it is not necessary to provide all the information below in order for us to consider your suggestion. However, the more information we receive, the more evidence we will have to assist in our decision-making process. If authorised, we may get in touch with respondents to ask follow-up questions. 

Please include your contact details in your response if you are open to receiving follow up questions.  

Please also indicate in your response whether you would like us to treat your response as confidential. 

Types of information 

Examples of the type of information include, but is not limited to:

• a brief description of the technology
• if the technology already exists, any examples of commercial deployment at scale
• if there is there any evidence to show that the technology is commercially viable (for example, a proven business model)
• if the technology is able to contribute to security of supply at periods of peak electricity demand (for example, by generating electricity or reducing electricity demand)
• any evidence relating to the reliability and availability of this technology at periods of peak electricity demand
• if the technology is significantly different from existing Capacity Market generating technology classes to warrant its own class
• a description of the fuel source or source of energy for the technology (including if it is fuelled by a fossil fuel)
• if the output of this technology fully controllable or if it is dependent on an intermittent energy source
• if there are any limitations on the length of time the technology can operate continuously at full capacity during peak periods (for example, limitations on fuel, energy source, or running hours and typical duration limits)
• contact details for any follow up questions

We will publish the outcome of the review by 1 December 2023, as required by Rule 2.4.1(b) of the Capacity Market Rules.