Open consultation

Open letter on new technologies in the Capacity Market, 2025

Published 22 September 2025

Applies to England, Scotland and Wales

Rule 2.4 of the Capacity Market Rules requires that, by 1 October each year, the Secretary of State consults interested parties to determine whether any new generating technologies are capable of contributing to security of supply. Where any new technologies not already identified as a Generating Technology Class are identified, the Secretary of State must amend the Rules to make those technologies 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 September 2024), six responses from stakeholders provided updates on emerging technologies:

• as in previous years, Vehicle-to-Everything (V2X) technology was highlighted for its capacity to enhance energy security through both demand reduction as well as the potential of Vehicle-to-Grid (V2G) discharge. With increasing numbers of EVs and the need for grid flexibility V2X remains a promising technology for the future. Challenges highlighted by stakeholders include upgrades to the grid to support bidirectional energy flows, standardisation across EV manufacturers and the costs associated with V2G chargers compared to conventional alternatives. In engagement with stakeholders in the 2024 Call for Evidence, some supported a separate GTC as they believed that EV chargers’ reliability in meeting the CM’s security of supply objective would be less than other DSR technologies and it should be de-rated accordingly. Others felt an additional GTC was unnecessary and that genuine turndown sufficiently covered the technologies. A few respondents felt it was too early at this stage to confidently establish separate GTCs for EV charging and V2G, given the nascent nature of the technologies
• Offshore Hybrid Assets (OHAs), which combine Offshore Wind Farms (OWFs) with Multi-purpose Interconnectors (MPIs), were highlighted in responses for their potential to enhance the efficiency and reliability of power supply. OHAs were seen to improve grid flexibility by allowing energy to be redirected when demand fluctuates, thus lowering curtailment of wind power. Multi-purpose interconnectors (MPIs), where wind farms are located in UK waters, and non-standard interconnectors (NSIs), connecting to wind farms abroad, are emerging as key innovations in this space. Stakeholders recognised challenges in co-ordination with Distribution Network Operators (DNOs) and infrastructure investment as barriers to integration into the CM
• stakeholders proposed smart transformers as technology to regulate voltage on the low-voltage (LV) network and reduce demand by maintaining voltage at minimum statutory levels. Stakeholders highlighted that, at present, deployment is seen to be limited by the lack of comprehensive LV monitoring
• Hydrogen to Power (H2P) was also highlighted as a technology for the CM Stakeholders, however, noted concerns around current commercial viability, challenges sourcing competitively priced green hydrogen and infrastructure issues with hydrogen storage. A H2P Call for Evidence, which has been published in parallel to this consultation, will gather evidence to inform how H2P plants should be categorised within the CM to enable the participation of H2P as a new technology. This includes gathering evidence related to the operation and reliability of the H2P plants
• a “flexible nuclear” model utilising Small Modular Reactors (SMRs) was also proposed by employing cogeneration for heat and hydrogen production, rather than just baseload. Barriers identified hindering the potential of such projects were cost, regulations and extensive infrastructure requirements

How to respond

Please respond with details of the new technology and evidence of its contributions to security of supply to FutureElectricitySecurity@energysecurity.gov.uk by 11.55pm on 26 October 2025.

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.

Please indicate at the point of submission if you are happy to receive follow-up communications and include your contact details in your response.

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

Next steps

We will publish the outcome of the review by 1 December 2025, as required by Rule 2.4.1(b) of the Capacity Market Rules.

Government will continue to consider emerging technologies with NESO and how best to assess their potential contribution to security of supply and any future participation in the Capacity Market.