The government has procured 49.26GW of capacity under the first ever capacity market auction for a clearing price of £19.40kW.
The government claims that the price works out at roughly £11 for the average household bill, costing a total of £0.96 billion in 2012 prices.
Combined Cycle Gas Turbine (CCGT) technology dominated the auction, accounting for over 45% of all capacity after it bagged 22,259MW of capacity. The next most successful technology in the auction was Coal/Biomass which accounted for 9,232MW of capacity, around 19% of the total capacity. Nuclear is responsible for 16% of total capacity, accounting for 7,876MW of the capacity.
Reacting to the results of the auction, Ed Davey, Secretary of State for Energy and Climate Change,described it as ‘great news for consumer’, noting that ‘fierce competition’ had helped drive down the price below what was predicted. He said: “This is fantastic news for bill-payers and businesses. We are guaranteeing security at the lowest cost for consumers. We’ve done this by ensuring that we get the best out of our existing power stations and unlocking new investment in flexible plant.”
Despite strong rhetoric from the government, storage technologies failed to be significantly represented with only 13 projects successfully bidding in the auction, representing just 5.48% of the capacity.
Reacting to the Capacity Market results, an Electricity Storage Network spokesman told Next Energy News: “The capacity market auction set out by the UK government is aimed to ensure the ‘lights stay on’, by providing some certainty of investment to operators of conventional power stations. It’s good to see some storage included in the auction, but more needs to be done if storage is to reach its full potential.
“The ESN’s members have identified a number of potential key actions to enhance the introduction of storage in Britain’s electricity infrastructure. It is our intention to use these proposals in our discussions with the Department of Energy and Climate Change and the Department of Enterprise Trade and Investment. The proposals will also open up discussions with the regulatory agencies OFGEM and the Utility Regulator.”
