A 333MW power station which Centrica is developing at King’s Lynn in Norfolk was the only new build combined cycle gas turbine (CCGT) plant to be offered a contract. Almost 10GW of potential new CCGT capacity dropped out of the descending clock auction as it cleared at a price of £22.50 per kilowatt per year (/kW/yr).
In total 52.4GW of de-rated capacity secured contracts for delivery in 2020/21 including 44.5GW of existing generation and 3.4GW of new build generation – up from 2.4GW in last year’s four-year-ahead (T-4) auction.
Despite only one new build plant securing an agreement, CCGTs were the dominant technology in the auction, winning contacts totalling 22.6GW. They included the 468MW Baglan Bay plant that Calon Energy is refurbishing but not SSE’s 1GW Peterhead plant which failed to win an agreement.
Aside from Centrica’s King’s Lynn plant, a 298MW open cycle gas turbine (OCGT) power station at Spalding in Lincolnshire was the only other large-scale new build gas plant to be sucessful. OCGTs are typically less fuel efficient, and therefore more carbon intensive, than CCGTs. Small-scale gas generators, with a capacity of less than 100MW, also secured new build contracts totalling 737MW. Coal and biomass plants won just over 6GW of contracts after SSE’s Fiddler’s Ferry and EDF’s Cottam both dropped out of the auction.
Small-scale diesel generators appear to have done slightly less well than in previous years. Analysis by environmental think tank Sandbag shows just 76MW of known diesel generation secured contracts. A further 474MW of new small-scale generation, for which the fuel type is not known, was also successful. Storage bagged 3.2GW of contracts – including 500MW for new batteries – and demand-side response 1.4GW.
The clearing price was higher than either of the previous two T-4 auctions in 2014 and 2015, which cleared at £19.40/kW/yr and £18/kW/yr respectively. (Note: All capacity figures quoted are for de-rated capacity.)
Successful capacity by technology type:
Source: Sandbag, based on National Grid figures
Business and energy secretary Greg Clark said: “Our homes and businesses need an electricity supply they can rely on all year round. We’ve provided them with that certainty, at a low cost to bill payers, years in advance.
“Technological innovation, as part of our low carbon future, will create jobs and opportunities across the UK. We are rebuilding an archaic energy system, bringing forward brand new gas power and innovative low-carbon capacity like battery storage to upgrade our energy mix.
“This is about more than just keeping the lights on. A modern, reliable, and flexible electricity system powers the economy and Britain’s future success.”
You can read how others have reacted to the auction results here:
Unsuccessful capacity by technology type:
Source: National Grid