Little encouragement for gas in UK capacity market auction

diarmaid williams 80x100

Thursday’s UK capacity market auction did not read as good news for the country’s gas-fired power industry, with just one combined cycle gas turbine (CCGT) new build power plant

The 18th December saw the closure of the capacity mechanism through which plants would be awarded contracts on the basis that they remain online to 2018/19 and deliver power in these years, with the mechanism designed to ensure that the UK’s electricity market has sufficient generation capacity to 2019.

“The results of this auction saw only one CCGT new build, that being Trafford Power Station, as the clearing price fell below the point at which most CCGT fleet developers considered a CCGT new build to be worthwhile,” Paul Verrill, director of energy data specialists EnAppSys told Power Engineering International. “Meanwhile, existing CCGT plants at Brigg, Barry, Corby, Killingholme 1, Killingholme 2, Kings Lynn, Peterborough and Peterhead have not won contracts that would have helped secure their presence in the market to 2018/19.”
Peterhead gas power plant
Britain is the first country in Europe to set up a backup capacity market and governments pushing for renewable energy production are looking to London to prove it can work for generators as well as consumers.

The auction, held by National Grid, is designed to ensure backup power is available when intermittent renewable energy sources fail to produce electricity.

Despite that motive, the opportunity for participation of natural gas-fired power plants appear minimal.

Verrill told PEi, “Other CCGT plants may yet be built despite not having been awarded a contract, but the potential loss of CCGT capacity and the low levels of new build would seem to signify the end of the dash for gas era. The peak output of 20GW annually from 2008-2010 is already, at twice current levels of CCGT fleet generation, a distant memory.

“Barking, Roosecote and Teesside, which were the front runners of the dash for gas era, have already been closed or demolished and these results could see the disappearance of more of this older plant that has continued to struggle in a changing (and increasingly renewable) market. With these results, the dash for gas era could well and truly have come to an end.”

Another disappointed party is SSE with regard to its Welsh Abernedd plant. They said on Friday they would be unable to make a final investment decision to take the project forward.

Power generator InterGen also said it would be unable to sign off on investments in two new gas-fired power plants after they failed to secure contracts



Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...