Consultation outcome

Open letter on new technologies in the Capacity Market, 2025: government response

Updated 21 November 2025

On 22 September 2025, the government published its annual open letter inviting views on any new generating technologies which could contribute to security of supply. The letter aims to identify those technologies that are not already identified as a Generating Technology Class (GTC) and should be eligible to participate in future Capacity Market auctions. 

The department received 4 responses from stakeholders. We are grateful to respondents for taking the time to provide detailed responses and share technical insights from those working with innovative technologies. Some stakeholders commented on their responses to the open consultation, with their responses broadly supporting the range of proposals outlined in the separate, but related, Capacity Market consultation for changes for Pre-Qualification 2026. This consultation was open between 2 October and 27 November and government will publish its response to this in 2026.

New innovations in Hydrogen to Power (H2P) through Thermal Plasma Electrolysis (TPE) were highlighted as potentially enabling earlier and wider deployment of low-carbon H2P by improving hydrogen production at scale and at the point of use. This was suggested as being more efficient than other methods such as water electrolysis or steam methane reforming with Carbon Capture and Storage, as it only requires approximately one-fifth of the electricity used in water electrolysis. It was also suggested that TPE could help deployment of H2P without the associated enabling infrastructure (e.g. carbon capture and storage or hydrogen networks) required by other hydrogen production pathways.

Multiple stakeholders welcomed the department’s ongoing engagement through the adjacent H2P call for evidence published in October 2025, which considers technology class and de-rating options for hydrogen-to-power assets. H2P is an emerging technology and any innovations such as TPE are welcomed to enable its faster deployment at scale and at the point of use. Engagement with industry is ongoing through the call for evidence, the response to which will be published in due course.

Consumer Led Flexibility technology (known as Demand Side Response in the Capacity Market Rules) also features in multiple responses from stakeholders. Noting the significant volume of DSR already participating in the Capacity Market, some reiterated their calls for separate technology classes and bespoke derating factors depending on DSR technology types.

The government is currently exploring capturing more information to inform DSR technology classes, alongside other DSR policy reforms in adjacent consultations, the responses to which are due to be published next year.

A new technology class of Flexible Compute Capacity (FCC) was proposed. FCC would be a form of DSR whose response uses existing cryptocurrency mining infrastructure, turning that off at times of system stress. A feature of FCC is that it can be interrupted and restored frequently, with virtually no “warm-up” or “cool-down” time and can sustain curtailment for hours or days. It was argued that FCC’s unique characteristics could require a new Generating Technology Class (GTC) with a higher de-rating factor, reflecting its reliability and performance.

As in previous years, the potential for Offshore Hybrid Assets - including Multi-Purpose Interconnectors and Non-Standard Interconnectors combined with offshore wind - was highlighted, alongside their inclusion in the recent Capacity Market consultation for Prequalification 2026. The request for clarity on how these emerging assets could participate in the Capacity Market given pending investment decisions and regulatory milestones has been noted, and Government will respond in due course, separate to this publication.

We appreciate the input from stakeholders on these emerging technologies and their potential roles within the Capacity Market. The insights provided will aid our continuous assessment of how these technologies can contribute to securing a low-carbon, resilient energy system.

We will continue to evaluate the opportunities and challenges provided by these emerging technologies with the National Electricity System Operator and assess how best to address concerns around technical feasibility and appropriate regulatory changes. We remain committed to ongoing engagement with stakeholders to ensure the Capacity Market can incorporate viable, innovative technologies aligned with our energy security and clean power objectives.

The next annual letter will be published in autumn 2026.