Correspondence

Full details of auction parameters and interconnector de-rating factors

Published 22 July 2024

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This publication is available at https://www.gov.uk/government/publications/capacity-market-auction-parameters-letter-from-desnz-to-eso-july-2024/full-details-of-auction-parameters-and-interconnector-de-rating-factors

Table 1: Auction parameters

T-1 Auction for delivery in 2025/26 T-4 Auction for delivery in 2028/29
Auction target capacity 6.5 GW 44.0 GW
Demand curve: minimum capacity at price cap 5.5 GW 42.5 GW
Demand curve: maximum capacity at £0 7.5 GW 45.5GW
Reliability Standard 3 hours LOLE 3 hours LOLE
Net CONE £49/kW/yr £49/kW/yr
Price Cap £75/kW/yr £75/kW/yr
Price Taker Threshold £25/kW/yr £25/kW/yr
15-year agreement threshold N/A[footnote 1] £340/kW[footnote 2]
3-year agreement threshold N/A[footnote 1] £170/kW[footnote 2]
Indexation N/A 2023/24

Table 2: Interconnector de-rating factors

T-1 auction 2025/26 Delivery Year T-1 auction 2025/26 Delivery Year T-4 auction 2028/29 Delivery Year T-4 auction 2028/29 Delivery Year
Interconnector Connection capacity (GW) ESO range (%) DRF (%) ESO range (%) DRF (%)
IFA (France) 2 - - 25-77 62
IFA2 (France) 1.1 - - 25-77 63
ElecLink (France) 1 - - 25-77 67
BritNed (Netherlands) 1.2 - - 57-92 66
Moyle (Northern Ireland) 0.5 - - 6-78 54
EWIC (Republic of Ireland) 0.5 - - 6-78 54
Greenlink (Republic of Ireland) 0.5 12-58 49 6-78 54
NemoLink (Belgium) 1 - - 48-88 67
NSL (Norway) 1.4 - - 71-96 75
VikingLink (Denmark) 1.4 - - 60-92 60
Neuconnect (Germany) 1.4 - - 55-90 60

  1. Multi-year agreements are not awarded in the T-1 auction. ↩ ↩2

  2. Multi-year agreement thresholds are adjusted from the previous T-4 value (for the 2027/28 delivery year) for inflation, indexed to the 2023/24 inflation level, and rounded to the nearest £5. ↩ ↩2

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