Capacity Market procurement targets see volumes set to fall

CM volumes

The government has set target procurement for the winter of 2022/23 at 44GW. The capacity will be procured in an auction on 30-31 January.

Capacity for the following winter (delivery in 2023/24) is expected to be slightly lower at 43.3GW but BEIS said it would reconfim that figure after the T-3 auction had been run.

In both cases the volume is significantly lower than was procured in the most recent auction, for the winter of 2021/22. In that auction, four years ahead of delivery, 50.41GW of capacity won contracts.

The reduced procurment for 2022/23 returns the CM to its initial trend for lower volumes. Earlier auctions procured 49.26GW for 2018/19 and 46.35GW for 2019/20.

The biggest procurement so far has been for delivery next winter (2020/21): following the T-4 auction contracts were signed with 52.42GW of capacity. At the end of May last year it was suggested that no additional capacity should be added to the plants that have already secured a CM contract for 2020/21. But at that time BEIS said the government had committed, as part of its State Aid notification, to set targets forT-1 auctions at a level of at least half the original set-aside (600MW in this case). It said it was concerned that last year’s CM suspension might mean some capacity was no longer available. As a result, BEIS has confirmed that the upcoming T-1 Capacity Market auction will be seeking to procure 300MW of capacity for delivery in the winter of 2020/2, BEIS has confirmed.The ‘top up’ auction will take place on 6-7 February.

 

Further reading

BEIS raises 2020/21 ‘top up’ capacity auction target from zero to 300MW

Capacity Market: BEIS consults on T-3 auction in 2020 and entry for renewables

T-1 auction clears at £0.77/kW

OPINION: Lesson from the Capacity Market debacle: put your trust in markets, not regulation

Ofgem confirms Capacity Market role for co-located storage – including mobile options

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