The capacity market auction for delivery next winter cleared at £1/kW/year.
The low price reflects a large volume of capacity, around 3GW, bidding for a requirement of just 300MW. In the end, the EMR delivery body ended buying just over a gigawatt of derated capacity, with the Nemo interconnector taking the lion’s share, some 820MW.
The capacity market pays generators and demand-side response providers to be available to deliver power or reduce consumption if there is a shortage of power over winter.
The cost of the insurance programme is added to energy bills.
Last Friday, the auction for power to be delivered in there year’s time cleared at £6.44, a new low for a multi-year auction.
The previous T-1 auction cleared at 77p/kW.
See details here.