Capacity market auction results finalized

Ed Davey, Secretary of State for Energy and Climate Change, has confirmed the results of the first Capacity Market Auction. The competition has driven costs down below an expected level.

The Capacity Market is an energy guarantee. It ensures there is sufficient capacity to meet electricity demand in 2018/2019. Electricity suppliers bid at a capacity auction promising that if they win a contract, they will provide electricity when required. In return there is a steady payment on top of the electricity sold.

The main result is that on auction closure on 18 December, there was sufficient capacity to remain open at the end of the decade whilst also unlocking new investment.

Ed Davey said:

“This is fantastic news for bill-payers and businesses. We are guaranteeing security at the lowest cost for consumers. We’ve done this by ensuring that we get the best out of our existing power stations and unlocking new investment in flexible plant.” There are further measures the Government has implemented as part of their strategy. An estimated £45 billion has been invested in electricity generation and networks between 2010 and 2013 to encourage new investment in the short, medium and long term.

The official results can be viewed on the National Grid’s website.