Skip to content

Capacity Market Auction For 2019 – No New CCGT

December 11, 2015

By Paul Homewood       

 

image

http://www.telegraph.co.uk/finance/newsbysector/energy/12045006/Coal-nuclear-and-diesel-to-keep-lights-on-in-800m-scheme.html

 

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.

7 Comments leave one →
  1. Green Sand permalink
    December 11, 2015 2:07 pm

    Looks like the government are trying to slow the coal plant closures. BBC Look North running a story about government in talks to keep Eggborough operational (standby)

    ‘Eggborough power station could be part of ’emergency plan’ to avoid blackouts’

    http://www.bbc.co.uk/news/live/uk-england-leeds-35059786

    Apparently contracts are being studied, smacks of desperation. Keeping coal plants on standby is going to be very costly and just how quick could a beast like Eggborough come on line?

  2. December 11, 2015 2:30 pm

    Reblogged this on Petrossa's Blog and commented:
    As Denmark, Germany, The UK comes to it’s senses forced by those silly things as ‘facts’and ‘reality’

  3. Andrew Duffin permalink
    December 11, 2015 3:17 pm

    So because the subsidies to unreliables are putting real generators out of business, the solution is to provide more subsidies, this time to the real generators, in order to allow them to compete with the subsidies already provided to the unreliables?

    Did nobody ever think of simply cutting out the subsidies that caused the problem in the first place?

    When did we completely take leave of our senses?

    • December 11, 2015 5:10 pm

      “When did we completely take leave of our senses?” Government insane policy over the last 20 years is nothing to do with us. Our warnings have been totally ignored by green politicians.

  4. December 11, 2015 3:30 pm

    Carrington II would more than double the 810MW that is being built.

    The approved application would ‘increase the generating capacity to 2,060MW.’
    http://www.traffordpower.co.uk/

    Possibly a test case to see if DECC is prepared to put its money where its mouth is.

    • December 11, 2015 5:11 pm

      “Possibly a test case to see if DECC is prepared to put its money where its mouth is.” I think you mean “Possibly a test case to see if DECC is prepared to put consumers’ money where its mouth is.”

    • catweazle666 permalink
      December 11, 2015 8:18 pm

      “Possibly a test case to see if DECC is prepared to put its money where its mouth is.”

      That depends on how many and how thick the brown envelopes promised to the ‘usual suspects’ are, doesn’t it?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: