Comment on capacity market auction results
Dr Simon Cran-McGreehin, Head of Analysis, comments on the results.
By Tricia Curmi
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Last updated:
Yesterday’s Capacity Market auction secured 42.4 gigawatts of capacity for delivery year 2025/26, at a price of £30.59 per kilowatt-hour. [1]
Commenting on the results, Dr Simon Cran-McGreehin, Head of Analysis at the Energy and Climate Intelligence Unit (ECIU) said:
“By securing this back-up generation, this latest capacity auction is helping to cut the costs of the electricity system by enabling the UK to make the most of cheap renewables.
“Even with the higher clearing price in today’s auction, the costs of providing this security are dwarfed by the costs of the gas crisis that’s directly adding at least £500 to household bills from April and driving almost all of the 54% hike in home energy costs.
“When these capacity contracts kick in, the UK will have an extra 6GW of offshore wind installed, giving homegrown, net zero power that’s free from international interference
and that pays back in a gas crisis – in addition to today’s wind farms that are set to pay back at least £660million during the current gas crisis.” [2]
Notes to editors:
1. The Capacity Market Auction Results were updated yesterday and can be found here: https://www.emrdeliverybody.com/CM/T42022.aspx
The total capacity of 42,364 MW included the following sources:
· 27,632 MW from gas
· 6,966 MW from interconnectors
· 2,528 MW from pumped storage
· 1,093 MW from battery storage
· 988M W from demand side response
· 990 MW from nuclear
· 842 MW from hydro
· 633 MW from waste
2. Savings due to renewables are based on forecasts of payments under ‘Contracts for Difference’ by the Low Carbon Contracts Company: https://www.lowcarboncontracts.uk/events/webinars/cfd-interim-levy-rate-and-total-reserve-amount-ilrtra-q2-2022
For more information and media bookings:
Kathy Grenville, Communications Officer, ECIU, email: kathy.grenville@eciu.net, Tel: 07501 874 214