- The auction cleared at £6.44/kW/yr
- Most of our assets successfully secured an Agreement
Following the recent decision of the European Commission that the GB Capacity Market is compatible with the EU State aid rules, the T-3 CM auction has completed, for delivery 2022/23.
The UK Government’s Department for Business, Energy and Industrial Strategy (BEIS) has announced that the capacity auction has cleared at £6.44/kW/yr. 45058.832 MW have been secured for the UK for delivery in 2022/23.
BEIS has released a provisional list of the UK assets which have successfully secured an Agreement, which you can view here: https://t.co/ZgPZfXoY5l. This information is still subject to Secretary of State approval.
RWE Generation has secured Agreements for all of the sites that were entered into the auction, with the exception of our distributed assets sites at Seal Sands (formerly Conoco Phillips) and Cheshire, and 2 x 20 MW new-build projects in Cheshire and Grimsby. This means we have 6,544MW of capacity agreements for the 2022/23 delivery year.
It is disappointing that not all of our assets were successful. However, this result is fully aligned with our auction strategy and is below the required price for an Agreement to make economic sense for these assets. All of these plants have prequalified and will be participating in the T-4 auction (delivery 2023/24) in March 2020. Seal Sands and Cheshire already have Capacity Market agreements for delivery in 2021/22.
The reinstatement of the Capacity Market in November last year has provided stability for our generation business moving forward. We will continuously look for opportunities to develop and look for efficiencies and cost saving across our business.
*UPDATE*: The T-1 Capacity Market auction for delivery in 2020/21 finished on Friday 7 February and cleared at £1.00/kw/yr with 1024.4MW being secured. RWE only entered one plant into this auction; Seal Sands (Conoco Philips) which did not win an agreement. This result is fully aligned with our auction strategy and is below the required price for an agreement to make economic sense for this asset. Seal Sands will be participating in the T-4 auction for delivery 2023/24 taking place on 5-6 March.
We look forward to participating in the future auctions in February and March 2020.