Capacity Market Auction Results
By Paul Homewood
The National Grid has published the provisional results for the Capacity Market Auction 2020/21, designed to ensure there is standby capacity available when needed.
The headline figure is that 52.4GW of capacity has been bought for £22.50/KW/Year.
This equates to an overall cost of £1179 million, all to be added to electricity bills.In addition, 6.5GW of capacity for 2020/21 was purchased in the 2014 and 2015 auctions, at a cost of £125 million.
I’ll take a closer look later, but at first sight there is little sign of any substantive CCGT capacity, that the government was banking on.
Only 3.4GW of new build generations has been awarded contracts, and this includes 818MW from Carrington Power, which is already operational.
The Auction Registers do not indicate technology type, but there are only two other substantial new build generating entrants, both of which are CCGT:
- Centrica Kings Lynn – 333MW
- Spalding Energy – 298MW – this is an expansion of the existing power station there.
Meanwhile, the auction continues to be dominated by existing CCGT, coal and nuclear capacity, for whom anything they earn from Capacity Market payments is simply extra profit.
FOOTNOTE
Just to confirm, the Clearing Price is £22.50/KW, and not per MW as I incorrectly stated.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
I would not say that capacity payments are pure profit in all cases, as it must cost a lot just to maintain a power station in readiness. I like the idea of capacity payments, as it reduces the risk of building of new plant, but there is still a massive risk in recovering the cost of construction, given the threat of a future loony-green govt, which can effectively shut you down if you’re not on the Greenpeace approved list.
There is still no doubt that the lunatics are still in charge of the electricity policy, which includes battery storage. Here is the Government statement:
https://www.gov.uk/government/news/new-gas-power-and-battery-storage-will-ensure-britains-electricity-demands-are-met-for-the-winter-of-202021
I note the announcement refers to a cost of £22.50 per kilowatt hour. I fear they might be right.