Carter Jonas
Carter Jonas

Capacity Market

Capacity market

The annual Capacity Market auction closed on Thursday 8th December with a clearing price of £22.50 kW/Yr.

The annual auction is one of the main opportunities for new development sites to secure a long term contract to supply power to National Grid. The recent T-4 auction secured power from new sites for delivery in 2020/21.

The auction takes the form of a ‘Dutch Auction’ where by a starting price is lowered each round until enough of the pre-qualified capacity withdraws to reach National Grids required capacity for that year. A total of 69,777MW of capacity pre-qualified with 52,425MW securing a capacity contract, equivalent to 75% of all those who entered the auction. Of this, 4,779MW of capacity was awarded to new build or refurbishing generation sites equating to roughly 7% of the total capacity procured.

The rapidly developing storage industry received positive signals with a total of 3,201 MW or 6% of capacity going to energy storage sites. Although this figure does include some large pumped hydro storage, a high number of new build battery storage sites were able to secure capacity agreements, demonstrating the technologies ability to compete with more traditional forms of generation.

The final clearing price, although lower than the £30 kW/Yr figure anticipated by the industry, is likely to mean developers remain active in their search for new sites with viable grid connections and so we expect landowners will continue to receive new approaches over the coming year.

Peter Robinson

Senior Energy Specialist

Peter is a Senior Energy Specialist and is based in our Harrogate office....

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