T-1 auction clears at £0.77/kW

The T-1 Capacity Market auction, securing 3626.196MW of ‘top up’ supply for the coming winter, cleared at a price of 77p per kW per year. Market participants are still waiting to hear whether the CM will be back in operation for the winter period, as the result of a European Commission investigation into whether the CM breaches State Aid rules is not expected until after the summer. Meanwhile suppliers have a ‘voluntary’ mechanism for collecting CM payments from consumers, which will become due immediately any State Aid clearance is granted.

Just 38% of the 9420.357MW of capacity that entered the auction won an agreement. That included the new Nemo interconnector, which went into operation at the start of the year.

One large new gas-fired power station won a contract –  329MW KIngs Lynn, which has undergone major refurbishment.  Most new gas plant was in the form of small reciprocating engines – 26 sites won contracts, together totalling 233MW  - less than the King’s Lynn site. Three energy from waste plants and one CHP unit were also successful.

On demand side response 11 proven and 93 unproven bidders exited the auction. Only 29 bidders totalling 202MW were successful.

See the full provisional auction results here

Further reading

Work starts on CCGT at King’s Lynn

Renewables to join Capacity Market

Capacity Market ‘must be simplified’ Ofgem says as it consults on five-year review

BEIS makes CM supplier payments voluntary but warns of immediate bill on market reinstatement