Last week’s T-1 Capacity Market (CM) auction in the UK cleared at a record low clearing price of just £0.77 (US$0.97) per kilowatt, with just one new build battery storage project winning a contract.
The auction, which concluded earlier this week, procured just over 3.6GW of capacity for the 2019/20 winter period, ultimately supporting 129 Capacity Market Units (CMUs). The CM mechanism pays generators to ensure energy supplies are secure and reliable during those periods.
But the low clearing price spelled trouble for specific technology types. Existing CMUs outperformed new build in the auction, and battery storage in particular struggled to complete against other generator types like open-cycle gas turbines (OCGT).
In total, battery storage represented less than 1% of successful contracts won in the CM auction, while OCGTs alone secured more than 22% of contracts available.
Just the one new-build battery storage CMU secured a contract; Centrica’s 49.99MW Roosecote battery, which was formally announced as completed in December last year, securing a one-year agreement at its de-rated capacity of 8.733MW.
The record low clearing price is significantly lower than the £6/kW price at which the last T-1 top-up auction cleared at last February, which at the time raised concern over the scheme’s future role in procuring reserve capacity.
Of course there are still more pressing concerns surrounding the future of the CM, with the scheme still effectively suspended pending the outcome of an ongoing European Commission investigation into its State Aid approval.