Capacity auction clears at lowest price yet

The Capacity Market auction has cleared its lowest price yet after the Early Auction to secure backup capacity for the coming winter drew to a close this afternoon (2 February).

The exact clearing price is not yet known but will be revealed, along with the provisional results, later this evening. The auction cleared in 14th round of bidding which covered the price range £10 to £15 per kilowatt per year (/kW/yr).

The descending clock auction saw bidders either stay in or drop out as the asking price was gradually reduced until the remaining capacity matched the procurement target.

The procurement target was set at 53.6GW, although in practice the target actually varies slightly, with additional capacity being procured if the auction clears at a low price. Around 59.3GW of capacity entered the auction on Tuesday leaving in the region of 5.7GW to drop out.

Roughly 1GW of surplus capacity remained as the penultimate round of bidding came to a close this morning. 

The most recent four-year-ahead (T-4) auction in December cleared at £22.50/kW/yr.

Capacity Market Early Auction: Progress after 13th round of bidding

Source: National Grid

Author: Tom Grimwood,
Channel: Markets & Trading , Policy & Regulation , Finance & investment
Tags: National Grid

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