The T-1 Capacity Market auction for delivery of power next winter cleared at a record low of £6/kW/year.

Some 10.6GW of capacity, more than double the available 4.9GW, competed in the auction which eventually saw 5.8GW of secured capacity for Winter 2018/2019.

The clearing price compared to the £6.95/kW/year seen last year.

Demand Side Response (DSR) won a total of 430.5MW capacity, 7.45% of the total procured. SmartestEnergy secured 160MW of the total unproven DSR contracts awarded.

Battery storage won just 97.5MW of capacity, amounting to 2% of the total awarded and almost 70% of the new build battery storage capacity exited the auction before it cleared.

SmartestEnergy’s Head of Markets Boz Bozhkov said: “Many new battery storage projects just didn’t find the much-needed financial support and confidence to accelerate and build for the next delivery year. We would expect that the T-4 auction (being staged this week) will be more forgiving and would offer the support for these important new assets.”

Failing to secure a contract in the auction saw the closure announced of the Eggborough power station in Yorkshire, which supplies power to 2m homes and employs around 170 people.

‘Subsidising renewables’

James Court, Head of Policy and External Affairs at the Renewable Energy Association, bemoaned the fact that under six per cent of capacity secured is renewable and around two per cent is storage said:

“This is another example of Government subsiding fossil fuels whilst blocking the cheapest renewables to market,” he said.

“The Government has confirmed that there will be no new spending on renewable power beyond 2021 and there is a significant lack of clarity around the future of renewable heat and transport fuels.

No long-term carbon price has been assigned, yet the Government is happy to directly financially support gas and diesel projects. That funding can be better used to drive innovation in the wide range of storage technologies instead.

“We are in the bizarre situation where we are propping up fossil generation, but scaling back support for technologies that are cheaper, cleaner and will provide future proofed jobs.

The government’s energy policy needs a complete rethink or we will be left behind with a dirty, antiquated and expensive energy system.”

The confirmed results for the T-1 auction will be released on 13 February. The T-4 auction starts on the 6 February to secure 50.1GW capacity for delivery in 2021/22. Last year’s T-4 auction closed at £22.50.

> Read SmartestEnergy's blog on the results