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GB T-4 2024/25 Capacity Market Auction Results

Written by John Perkins
11/03/2021

The GB T-4 2024/25 Capacity Market auction cleared at £18/kW in line with the AFRY Central projection of £19/kW, but the full results have indicated some surprises.

Amongst the existing plants, three nuclear units exited without contracts, raising questions about the longevity of ageing plants versus the value they give to the system and their ability to collect future T-1 contracts. Three CCGTs exited, and the future success of existing plants will depend on the extent to which less flexible generators can continue to capture sufficient value from a system dominated by renewables. One of the six units at Dinorwig PSP also exited.

The results for new-build plants also show interesting trends, with a balance between technologies and a reflection of the different revenue streams different players expect to be available for their plants.

Drax successfully cleared three OCGTs, the first such plants since Spalding Energy Expansion in 2016, but a number of OCGTs didn’t clear and none of the new build CCGTs were successful.

573MW of battery storage was split between one hour and a significant quantity of two hour projects, signaling a shift in battery strategy away from primarily FFR, towards trading based on the BM, where longer duration storage is better able to capture value. Higher duration, higher capex batteries exited along with significant other one hour and two hour capacity.

Other winners included 483MW of gas recips. The projects successfully show a range of EHV and HV connected sites, potentially due to different strategies on different pools of value. Competition between recips in balancing and wholesale markets could mean that future new build may need additional value e.g. locations with a higher value from DUoS credits or DSO flex tenders.

Chart showing T-4 New Build Capacity

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John Perkins

Principal, AFRY Management Consulting

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Ali Lloyd

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