The second Capacity Market auction, which will secure extra capacity for 2019/20, opened this morning at 09:00. The auction acts like an energy guarantee by making sure there is enough capacity available to meet peak electricity demand.
The auction is open to generators (new and existing plants), Demand Side Response providers and interconnectors. This is the first year interconnectors are eligible to participate, increasing the competitive pressure on the auction clearing price and helping to ensure that security of supply is delivered at least cost to consumers.
Energy Minister Andrea Leadsom said:
“Our number one priority is to ensure that hardworking families and businesses have access to secure, affordable energy supplies they can rely on.
“The Capacity Market is a key part of our electricity market reform. The competition helps drive down costs, while ensuring we have enough generation power the nation. It also gets the best out of our existing power stations as we increase the amount of electricity we get from low carbon technologies.”
National Grid is responsible for running today’s auction and is allocating 44.7GW of capacity, enough to power Great Britain. There has been interest from large and small generators. Both established and emerging players in the market are bidding, representing over 57GW of capacity. This ensures that it will be a very competitive process and will help to keep costs down for bill payers.
Notes for editors:
The auction starts on Tuesday 8th December and there will be four auction rounds each day until the auction clears.
The Government is seeking to procure 44.7GW for delivery in 2019/20.
A further, one-year ahead auction, also for delivery in the winter of 2019/2020, will be held in 2018 to top-up the amount procured to the 2019/2020 target. Further auctions will be held for future delivery years on a rolling basis.
The latest the auction could finish is the last auction round on Friday 11th December.
Full list of those who have pre-qualified to take part in the auction.