Coal and gas-fired power plants were among the winners in the latest electricity capacity auction.
The Capacity Market cleared at a lower-than-expected price of £6.95/kW, equating to a guaranteed £377 million for UK power generators.
A total of 59.286GW entered the auction, of which 54.4GW are set to be handed contracts to provide electricity next winter, according to National Grid’s Electricity Market Reform (EMR) Delivery Body.
Gas-fired power stations secured the biggest share of contracts – 40.5% or 22GW – winning £153 million in payments.
Coal and biomass plants bagged 19% – 10.5GW, i.e. £73 million.
Demand side response technologies and storage secured 209MW and 2.7GW respectively while nuclear and hydro won 7.9MW and 678MW of the total share.
The auction is designed to minimise costs for consumers as the value of the contracts are expected to fall with each bidding round as companies compete for subsidies.
Energy Minister Jesse Norman said: “Reliable power supplies are essential for businesses to thrive and succeed. Thanks to this auction, homes and businesses can have confidence in the availability of that electricity at the lowest possible cost.
“More widely, the composition of the UK’s electricity supply is now clear beyond the end of this Parliament.”
The results remain provisional until confirmed by the Secretary of State.