The T-1 capacity market auction for delivery next winter has cleared at £6 per kilowatt.
The low price reflects the high level of capacity, 10.7GW, bidding for a target of 4.9GW, although around 5.8GW was awarded.
While auction volumes differed from last year’s T-1 auction, the clearing price was similar, suggesting some of those bidding saw it as a revenue top up.
The capacity market policy was originally intended to help provide security of supply and, where auctions award long-term contracts, help derisk power station construction.
The outturn for the this auction means around £35m will be added to customer bills next winter, in addition to capacity market costs for contracts awarded four years prior.
Gas took the lion’s share of contracts awarded, diesel took very little. Some 673MW of CHP and autogeneration won contracts; 632MW of coal and biomass; 443MW of DSR and 89MW of battery storage was successful.
See the EMR delivery body website for more details.
This article updated to reflect the actual clearing price from the indicated £5-£10/kW range, and higher volume procured over 4.9GW target.