The T-1 Capacity Market Auction for the 2024/25 delivery year concluded yesterday (20 February) after eight rounds clearing at £35.79/kW/year – 40% less than the £60/kW/year cleared in the 2023/24 auction.
This was confirmed this morning by Georgina Morris, head of capacity market policy – low carbon technologies for the Department of Energy Security and Net Zero (DESNZ), on the second day of Solar Media’s Energy Storage Summit 2024 (ESS24).
The provisional results show that roughly 9.5GW of de-rated capacity entered this year’s auction with less than 300MW exiting in the first seven rounds.
Jake Thompson, data scientist at energy data analyst’s Montel EnAppSys pointed out that the c.819MW Sutton Bridge and c.850MW Severn power stations (the two largest units in the auction) both exited in the eighth round, removing their collective c.1.5GW of capacity from the auction and causing it to clear. This meant that the 7.6GW of capacity was awarded across a total of 277 capacity market units (CMUs)
“T-1 auction for the 2024/25 delivery year, we procured 7.6GW of capacity and they cleared in round eight at £35.7p,” Morris confirmed at ESS24 during the UK Battery Energy Storage System (BESS) panel this morning.
Speaking with a BESS focus, Morris added that from her conversations, she believes that “the capacity market is starting to become a more important part of the revenue stack.”
Capacity Awarded by Primary Fuel Type (MW)
According to the National Grid ESO’s preliminary results, the majority of capacity was awarded to gas as a primary fuel type 2,943.79MW (38.53%), closely followed by nuclear 2767.26MW (36.22%) Demand-Side Response (DSR) was then awarded the third largest volume of capacity at 710.08MW (9.29%).
Among renewables and tech batteries, the most capacity was awarded to energy storage batteries and pumped storage receiving 655.16MW (8.58%) and 185.38MW (2.43%), respectively. As well as this, hydro was awarded 98.92MW (1.29%), offshore and onshore wind 73.87MW (0.97%) and 33.36MW (0.44%), respectively and solar 10.45MW (0.14%).
Fellow panellist Tom Palmer, head of network infrastructure at BESS operator Zenobe said that the results of the T-1 auction were “above market expectations”.
The T-4 auction for delivery year 2027/28 will take place next week.
