Gas-Fired Units Dominate Latest GB Capacity Round
National Grid has announced provisional results of the Great Britain generation T-4 Capacity Auction from October 2021 to September 2022, with more than half the capacity awarded being gas-fired.
The auctions were set up to ensure there is always enough generation capacity on standby to safeguard future peaks in electricity demand. In order to secure capacity revenues, successful providers must produce electricity or reduce demand when the system requires it in 2021/22, as failure to do so will result in penalties being levied.
These latest British capacity auctions, announced February 9, mean that some 50,410 MW of electricity generating capacity has been provisionally awarded a clearing price (subsidy) of £8.40/kW/year (at 2016-17 prices) for delivery in the 12 months from October 2021; the auction cleared on February 8 at 3.30pm GMT, and its results remain provisional for eight working days, pending confirmation by the government’s Business and Energy Secretary.
Of the 50,410 MW total successful, combined cycle gas turbine (CCGT) plants that run on natural gas accounted for 23,022 MW (45.7% of the total), while 4,644 MW are combined heat and power (CHP) units that are usually gas-fired (9.21% of the total). Nuclear units accounted for 7,926 MW or 15.7%. Existing generation plants make 43,310 MW, so most of the total awarded.
Drax, EDF, E.ON, RWE, SSE, Uniper, Iberdrola (Scottish Power), and Uniper were among the more well-known generators that made successful bids in the auction while several others were joint venture generators.
SSE said it provisionally secured agreements 4,177 MW in the auction --made up of 3,371 MW gas-fired and embedded power plants and 806 MW of its hydro-electric units – thus securing £35.1mn ($49mn) payment, adding that the revenue will be received on a pro-rated basis throughout the delivery year. The company also said that 2,811MW of its capacity was pre-qualified but ultimately unsuccessful in the auction, including its proposed Keadby-2 newbuild CCGT (767 MW) in the English Midlands near the River Humber, and its Fiddler’s Ferry coal-fired plant (1,743 MW) which has capacity obligations up to September 2019.
The latest awards follow the T-1 Capacity Auction results earlier this month in which 5782.9 MW was awarded a clearing price of £6/kW/year for being available in the year starting October 2018.
Capacity arrangements on the island of Ireland (Republic of Ireland, and UK-Northern Ireland) are separately administered from Great Britain. The EU has now approved electricity capacity arrangements covering most of the EU's population.