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UK capacity auctions secures 40.8 GW of backup power led by gas plants

Mar 11, 2021

(Reuters) – Gas-fired power plants secured 26.4 gigawatt (GW) of a total 40.8 GW of awarded backup power contracts in a UK capacity market auction, provisional data released by National Grid showed.

The capacity market is a British government scheme to pay energy providers to maintain spare capacity to ensure adequate supply for future years.

The latest auction on Wednesday for 2024/25 secured 40.8 gigawatts (GW) of back-up electricity capacity and cleared at 18 pounds ($25.08) per kilowatt per year.

Electricity transmission cables connecting Britain with neighbouring markets secured a total capacity of nearly 6.9 GW across nine interconnectors, followed by 2.1 GW of pumped hydropower capacity.

Nuclear power was awarded just over 2 GW of agreements, with operator EDF Energy saying it secured one-year agreements for the period Oct. 2024 to Sept. 2025 for four of its reactors, in addition to three units at its West Burton gas-fired power plant and two new-build battery storage units.

Drax secured agreements to provide nearly 617 GW of existing capacity, predominantly from pumped storage and hydro assets which are worth 10 million pounds in 2024-25.

Germany’s RWE said it had secured 6.5 GW of capacity agreements, most of it gas-fired units.

Another German utility, Uniper, secured 4.2 GW of agreements across gas- and diesel-fired units, the National Grid data showed.

Energy supplier SSE secured capacity contracts for just over 2.8 GW of electricity generation capacity for gas-fired, hydroelectric and pumped storage capacity as well as an onshore wind farm.

(Reporting by Nora Buli in Oslo; editing by John Stonestreet)