United Kingdom electricity capacity auction prices hit record low

To ensure sufficient electricity capacity for 2023/2024, The auction cleared at £60/kwh /year, down from £75/kwh/year.

The National Grid announced that the UK’s power capacity market procured a total of 5.78 gigawatts (GW) of capacity, according to a provisional auction document. The market was launched in 2014, with the aim of paying providers to make power supplies available quickly. The clearing price is reached when the offered capacity is equal to the demand. Auctions are usually held around four years before the delivery date, with a smaller auction taking place a year before delivery.

Out of the total 5.78 GW of capacity, 2.6 GW came from gas-fired power plants, 1.4 GW from nuclear reactors, and 627 MW from battery storage, with the remaining capacity coming from other sources. The auction results showed that about 80% of the capacity procured came from existing power assets. Major utilities including SSE, EDF, Uniper, and RWE secured agreements to provide power.

SSE won contracts that comprised nearly 1.5 GW of gas-fired capacity for the delivery year 2023/24, which runs from Oct. 1 to Sept. 30. This included its Keadby 1 and Medway gas-fired power stations, as well as smaller embedded plants of 45 MW each at Burghfield and Chickerell, according to a statement from the company. EDF secured contracts for 1.4 GW of nuclear power, while Germany’s Uniper secured 450 MW of agreements, including 412 MW of coal-fired capacity.


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