Consultation outcome

Open letter on new technologies in the Capacity Market, 2026: government response

Updated 5 November 2026

On 2 September 2026, the government published its annual open letter inviting views on any new or emerging 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 3 responses. We are grateful to respondents for taking the time to provide detailed responses. 

An updated assessment of deep geothermal electricity generation was provided, drawing on recent developments at the United Downs project in Cornwall. The response noted that geothermal generation is excluded from the existing Hydro GTC, and that a new class may be needed subject to how a particular configuration operates. For example, a facility producing both heat and electricity may need to be considered against the existing Combined Heat and Power GTC. Should a new GTC specific to this technology be required, further operational evidence would be needed to determine an appropriate de-rating factor and assess the technology’s contribution at times of system stress. The respondent suggested that the evidence currently available reflects early operation at a single site and is not yet sufficient to determine whether a new GTC is required. Further considerations were suggested on whether particular forms of deep geothermal generation could participate through an existing class and on how the technology’s contribution to security of supply should be assessed.  

The potential role of Ammonia-to-Power (A2P) in providing flexible, low-carbon generation was shared. Electricity generation could be met through ammonia-fired gas turbines and engines, or the on-site conversion of ammonia into hydrogen for use in turbines, engines or fuel cells. It was suggested that ammonia could provide a dispatchable fuel supply at times of system stress, drawing on established supply chains and bulk storage onsite or near ports, without relying on hydrogen networks or frequent fuel deliveries. The response suggested that some A2P technologies may be eligible under existing gas or fuelled generation GTCs, while others may require separate consideration. It argued that classification should reflect the complete generating system and requested that A2P receive similar consideration to Hydrogen-to-Power (H2P). 

In May 2026, the government published its response to the H2P and interconnectors Call for Evidence, setting out the latest Capacity Market policy position on both technologies. The government will continue to work with Ofgem, NESO and industry on the treatment of these assets in the Capacity Market, separate to this publication. Any implications for A2P would need to be assessed separately. 

As in previous years, the potential for Offshore Hybrid Assets (OHAs), including Multi-Purpose Interconnectors (MPIs) and Non-Standard Interconnectors (NSIs) combined with offshore wind, was highlighted. Updates included the continued development of the LionLink and Nautilus pilot projects, Ofgem’s April 2025 decision on their cap-and-floor parameters, and GriffinLink, a proposed Great Britain–Germany MPI. The government considered interconnectors through its recent Call for Evidence and subsequently updated the methodology for calculating their de-rating factors ahead of 2026 CM Prequalification. The treatment of OHAs within the CM framework will require further consideration in future. 

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 NESO and assess how best to address questions around technical feasibility, classification 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 2027.