UK Enhances Capacity Market Auctions Goals in Energy Transition

The UK government has announced a significant increase in its Capacity Market auction targets, a move that is seen as crucial in the country's bid to reach its net zero emissions target by 2050. This decision, which aligns with the UK’s overarching strategy to expand clean power capacity rapidly and cost-effectively, is part of the Clean Power 2030 target of 95% clean electricity [1][2].

### Reasons for Increased Targets

The increased targets are driven by the urgent need to procure substantially more capacity than in previous auctions to meet the government's ambitious clean energy goals for 2030. To meet these goals, about 43 GW of offshore wind capacity is required by 2030; current projections are around 35 GW, necessitating accelerated procurement in upcoming auctions to close this gap [4].

Another major driver is removing the rollercoaster volatility of fossil fuel markets by building clean power at pace and scale, providing long-term price stability and security for both consumers and businesses [5]. The reforms also aim to boost investor confidence through clearer rules and pricing models, including the Strategic Spatial Energy Plan and reforms to transmission charging [3].

### Implications of the Increased Auction Targets

The upcoming Capacity Market auction, scheduled for August 2025, will be the largest allocation round yet, indicating a marked escalation in capacity procurement targets [1]. By expanding contracts for difference (CfD) auctions on an unprecedented scale, the UK government envisions delivering cheaper and greener power to consumers while securing system reliability [2][5].

The reforms also include coupling capacity auctions with grid infrastructure improvements and a strategic spatial plan to reduce connection wait times and costs, which will help accelerate project delivery [3]. The increased auction targets will drive investment in the energy sector, fostering new jobs, growing the economy, and strengthening the UK’s energy security [5].

### Electric Vehicle Charging Infrastructure

In a related development, the Department for Transport has published its quarterly electric vehicle public charging infrastructure statistics. The number of fast charging devices with a power rating above 50kW has seen a 47% year-on-year increase, growing significantly to 10,118 [6]. Increasing the number of on-street charging devices is seen as critical for encouraging the public to switch to electric vehicles, as electric charging points within walking distance of households could encourage people to make the switch [7].

The legislation gives Ofgem the authority to appoint code managers and grants it transitional powers to consolidate the existing codes. Ofgem intends to begin the consolidation process before appointing code managers, with the initial phase involving bringing the consolidated codes under common contractual frameworks and simplifying them [8].

In conclusion, the increased Capacity Market auction targets reflect the UK’s commitment to rapidly build out clean energy infrastructure essential for hitting 2030 climate and energy security goals. The strategy combines procurement scale, regulatory reforms, and infrastructure planning to deliver a fairer, more affordable, and secure electricity system that supports sustainable economic growth and consumer protection.

References: [1] GOV.UK (2023). Capacity market allocation round 7 (AR7) - guidance for participants. Retrieved from

To ensure a steady energy supply and promote financial stability, the increased Capacity Market auction targets will encourage investment in the clean power industry, which is expected to create new jobs, boost the economy, and secure the UK's energy future.
In light of the country's ambitious clean energy goals, the finance sector plays a vital role in funding the necessary expansion of renewable energy, such as offshore wind, to reach the target of 95% clean electricity by 2030, as outlined in the Clean Power 2030 strategy.