A new auction to secure electricity capacity for next winter is open today.

The so-called ‘Transitional Arrangements’ auction aims to offer targeted support to Demand Side Response (DSR) to increase levels of participation in the two years before the full Capacity Market kicks in during winter 2018/19.

A spokesperson from National Grid told ELN the transitional auction is necessary for the two winters before the Capacity Market delivery “as margins are tighter due to plant closures”.

The amount being auctioned is 900MW and will run until Friday. Participants in the transitional auction are DSR units and small embedded generators.

There will be four auction rounds each day, with a cap of £40/KW per year. It will be reduced by £2.50/KW per auction round.

The graph shows the Rounded Excess Capacity added to the Potential Clearing Capacity, i.e. the remaining capacity or supply at the start of the auction.

The auction was “oversupplied”, with the capacity entering it standing at 1,110.028MW.

The ‘Excess Capacity’ is the excess supply over demand at a particular price, which is rounded to the nearest 100MW. Once the unrounded Excess Capacity falls below zero, the auction will clear.

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