Britain’s latest Capacity Market auction has secured 42.4GW for delivery in FY 2025-26, at a record price of £30.59 per kW per year.
On the back of fierce upward pressure on wholesale energy prices, that figure is a 35% rise on the last record, £22.50 per kW set in 2016.
Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit (ECIU), said the Capacity Market was still helping to “cut the costs of the electricity system by enabling the UK to make the most of cheap renewables”.
“Even with the higher clearing price in today’s auction, the costs of providing this security are dwarfed by the costs of the gas crisis that’s directly adding at least £500 to household bills from April and driving almost all of the 54 per cent hike in home energy costs,” he said.
“When these capacity contracts kick in, the UK will have an extra 6GW of offshore wind installed, giving homegrown, net zero power that’s free from international interference and that pays back in a gas crisis”, Cran-McGreehin went on. “That’s in addition to today’s wind farms that are set to pay back at least £660m during the current gas crisis.”
Gas power generators again won big in the latest CM auction, securing contracts totalling 27.6GW.
Clean power also showed strongly among the bids. Over 2.5GW of pumped storage capacity secured contracts, plus just over 1GW in battery storage projects and just under 1GW in demand side response (DSR) services.