Capacity Market Auction For 2019 – No New CCGT
By Paul Homewood
DECC has announced the results of this year’s capacity market auction, which is designed to contract standby electricity capacity for when renewables are not working.
The Telegraph reports, (along with the obligatory “black smoke” from cooling towers picture!).
Hundreds of millions of pounds in subsidies will be paid to diesel generators and old coal and nuclear plants to help keep the lights on later this decade, ministers are set to confirm on Friday.
National Grid is preparing to publish the results of the latest “capacity market” auction, a Government scheme that will pay energy companies to guarantee they can provide electricity in 2019-20.
On Thursday night, the company said the price of the subsidies would be £18 per kilowatt, to be paid for just over 46 gigawatts of capacity, giving a total subsidy bill of about £830m.
What dear little Emily forgot to mention is that, as some of us have been predicting, there is no new build CCGT capacity amongst the winners. As with last year’s auction, to cover the capital costs of new build, along with the loss making market conditions that gas power stations are facing because of subsidised renewables, CCGT operators need a much higher standby payment than £18/KW.
In contrast, for existing power plants, such as coal and nuclear, which are already paying for fixed and depreciation costs, £18/KW is a nice bit of bunce.
The full list of successful applicants is downloadable from the EMR Portal here. The only new CCGT plant is Carrington, with 810 MW, and this project is already under construction and is due to start up next year.
Moreover, we already know that the only successful new build CCGT plant in last year’s auction, Trafford, still has not managed to attract funding, and may not go ahead at all.
Amber Rudd declared last month that we need to start building new power stations quickly to replace the rapidly disappearing coal plants we have all so relied on. But it looks as if she will have to wait at least one more year.
Over 5GW of new build capacity exited the auction, mainly CCGT. Although the prices they exited at are not published, the summary table provided by the EMR Portal suggest some could have been over £40/KW.