23/12/2025
Insights Blog

The Department of Climate, Energy and the Environment published an initial decision on non-price criteria in renewable energy auctions, required under Article 26 of the Net-Zero Industry Regulation and Implementing Regulation.

We looked at the consultation in our briefing: Renewable energy auctions: Consultation on non-price criteria. Key aspects of the decision are summarised below.

  • Article 26 will be applied to all generation capacity in RESS 6 and subsequent auction.
  • The pre-qualification criteria are:
    • responsible business conduct: applicants will provide a self-declaration at auction stage. Supporting evidence will be based on the Corporate Sustainability Due Diligence Directive (or, for entities outside its scope, a widely used reporting framework that the Department will select),
    • cybersecurity and data security: applicants will provide a self-declaration at auction stage. NIS2 certification, once available, will be accepted as the preferred supporting evidence. Equivalent recognised standards / certifications may also be accepted where appropriate, and
    • ability to deliver: conditions will be the same as the previous RESS 5 auction, including the requirement to have full planning permission and a grid connection offer.
  • Data-transfer restrictions linked to Article 5(b) of the Implementing Regulation will be applied as regards only high-risk third countries, which does not include the UK.
  • The two non-price award criteria are:
    • energy system integration (“ESI”), intended to encourage hybrid projects. Stakeholders suggested that projects providing longer-duration storage should be more highly rewarded and that there should be a metric for project scale. The scoring methodology will be developed to reflect these points. An updated scoring table will be prepared informed by further engagement with stakeholders on optimum configurations and durations, and
    • resilience: all eight components on the latest list adopted by the European Commission will be assessed for each technology. Detailed scoring tables will be included in RESS terms and conditions, and all components of a type used in a project will be assessed.
  • Both criteria will be evidenced though self-declaration at auction followed by supporting evidence at delivery.
  • Scoring: consultation options 4 and 5, in which price accounted for between 70% and 85% of the total score, resilience for 5%, and ESI for between 10% and 25%, will be taken forward for further refinement. The price-scoring methodology will be revised so that the score for each bid is determined solely by parameters published before the auction (not on the basis of lowest bid or other ex-post variables). The final choice of percentage weighting between ESI and price will be settled in advance of the next relevant auction, taking account of wider policy, economic and technological developments relevant to hybrid projects.
  • Auctions will feature technology-specific auction pots and the evaluation correction factor used in previous auctions will not be used.
  • Force-majeure provisions will be introduced for non-compliance with non-price criteria.

The Department indicates it may change elements of the implementation of Article 26, which will be noted in responses to the relevant RESS consultation. It identifies three specific issues that will be considered in the 2026 RESS 6 consultation: eligible technologies and number of pots; exemption for projects under 10MW; and Unrealised Available Energy Compensation (“UAEC“). There are questions around whether ESI solutions capable of being proposed in bids enable generators to fully mitigate risk of the dispatch down compensated by the UAEC.

The Department seems to have taken careful account of practical issues described by consultees. One area that depends on wider policy and regulatory reform is hybrid projects. As we noted previously, development of market and system rules to support hybrid connections and hybrid units will be needed to enable solutions that would maximise ESI. Consultees highlighted that arrangements related to MEC-sharing, cross-charging and multiple legal entities, as well as the ability of hybrid projects to import/export and undertake arbitrage, materially affect the feasibility of ESI-enhancing configurations. Though these are not issues that can be addressed in RESS rules, a positive knock-on effect of the consultation would be prioritisation of the policy and regulatory reform that could fully unlock the potential of hybrid solutions.