Another two UK nuclear stations were unsuccessful in the T-4 capacity market auction for delivery in 2023-24, while the Keadby combined-cycle gas turbine (CCGT) project won a 15-year new-build contract, as did large amounts of new small-scale gas-fired capacity.
The auction cleared at £15.97/kW (€18.29/kW) in the 12th round on 6 March, well above the previous two main auctions, which cleared in single figures.
Nuclear
Despite the higher clearing price, the four units at the Heysham 1 and Hartlepool nuclear stations failed to secure agreements. The stations come to the end of their lifetimes in 2024.
French state-owned utility EdF said that "the revenues at the clearing price did not provide sufficient reward to take on the risk of penalties arising from non-delivery".
The Hinkley Point B and Hunterston stations did not participate, because they are due to shut in 2023. These units had failed to secure contracts in the T-3 auction for 2022-23.
But EdF said it is confident that Heysham 1 and Hartlepool will operate up to their scheduled closure date of 2024. It may enter the units in the T-1 top-up auction or participate in the secondary market "if the conditions were right".
As a result, just under 4GW of de-rated nuclear capacity across four stations was successful in the auction, down from 7.9GW in the auction for 2021-22.
Gas
UK utility SSE won a 15-year contract for its Keadby 2 CCGT, with de-rated capacity of 804MW. The station is already under construction, which would have made it bid more competitively than prospective new-builds such as UK firm Drax's proposed CCGT conversion. Drax has said it would only go ahead with the project if it secures a capacity market contract.
The higher clearing price attracted a large amount of small-scale gas projects. Excluding Keadby, a total of 715MW of de-rated new-build gas capacity was successful, mostly with 15-year agreements. This was spread across 73 projects with de-rated capacities of 2-47MW.
UK utility SSE's Medway and Keadby 1 CCGTs again failed in the auction, but still have agreements through to September 2022. The stations were commissioned in 1995 and 1996, respectively.
And domestic firm Calon Energy's CCGT assets — Sutton Bridge, Baglan Bay and Severn — were all unsuccessful. Sutton Bridge was built in 1999 and has 56pc efficiency. Severn was commissioned in 2010 in and has 57pc efficiency. Both were successful in the auction for 2022-23.
Baglan Bay was commissioned in 2004. It was entered as a refurbishment project seeking a 15-year agreement. Its efficiency is 56.6pc, but this would rise to 58.4pc if its refurbishment goes ahead. It had also failed to win a refurbishment agreement in the 2022-23 auction.
Coal
Once again, two of four units at the Ratcliffe-on-Soar plant were successful.
Ratcliffe will be Britain's last remaining coal-fired station, but will have to shut at the end of the 2023-24 delivery period after the government brought forward the phase-out of coal by a year to October 2024.
Interconnectors
Every interconnector which participated in the auction was successful, including the North Sea Link with Norway, which is targeting completion by the end of 2021. It was also successful in the 2022-23 auction.
The two links with France that are due on line this year were also once again successful, as were all the existing interconnectors, which link Britain with France, the Netherlands, Ireland and Belgium.
Storage, DSR and wind
A total of 114MW of de-rated new-build battery storage capacity was successful in the auction, as was 3MW of existing capacity.
But in addition to this, storage developers Anesco and Eelpower won agreements for a combined 97MW by entering projects as demand side response (DSR) assets rather than as storage, repeating a strategy used in the auction for 2022-23.
A total of 1,167MW of DSR capacity was successful in the auction.
Three onshore wind projects with a combined de-rated capacity of 11MW were successful and won 15-year new-build contracts.
