This price was the lowest of any previous capacity market auction and at least £12 lower than the previous auction held last year (£22.50 per kW per year).
Differing from previous auctions this one was only offering 1 year contracts and was only confirmed in March 2016. It was announced to address concerns over the tight supply margins for the upcoming winter, given the number of coal plant closures since the beginning of 2016.
The level of capacity secured by the auction for delivery in 2017/18 totalled 54.4 GW. This was an increase of over 5 GW from the first Capacity Market auction for 2018/19 delivery and 8 GW more than the 2015 auction for delivery in 2019/20.
In comparison to previous auctions there was a much lower amount of excess capacity available. Initially there was an excess of 6GW compared to 19GW from the 2020/21 auction held in December. This auction was only able to offer 1 year contracts, compared to 15 year contracts offered in the previous auction. As a result only established plant and those with a quick build time e.g. batteries could bid in, rather than new build developments or refurbishments.
|Auction||Delivery Year||Capacity||Clearing Price|
|T-4 December 2014||2018/19||49.26 GW||£19.40 / kW / year|
|T-4 December 2015||2019/20||46.35 GW||£18.00 / kW / year|
|T-4 December 2016||2020/21||52.42 GW||£22.50 / kW / year|
|T-1 January 2017||2017/18||54.4 GW||£6.95 / kW / year|
|T-4 December 2017||2021/22|
The nature of the capacity that obtained a Capacity Market contract will be confirmed soon by the EMR delivery body.
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