T-4 2027/28 Capacity Auction

By Paul Homewood

h/t idau

The results of the T-4 Capacity Auction for 2027/28 have been announced:

https://www.emrdeliverybody.com/Capacity%20Markets%20Document%20Library/T-4%20DY%202027-28%20Provisional%20Results%20Report.pdf

These are the highlights:

Contracts have been awarded for 42.8 GW of de-rated capacity. Added to 15 year contracts already awarded in earlier years, this increases standby to 56.6 GW.
The auction price is £65/kw, meaning giving a cost for T-4 of £2.8 billion, £100 per household.
Only 1.6 GW of new build generation is contracted, with nearly all of the rest being existing generators, interconnectors and demand response (DSR)

Maybe the most significant thing about T-4 was its almost total failure to secure any new build generation. The only successful bids went to waste generators – 208MW, and reciprocating engines – 427 MW. Neither will be of any use for our long term energy security. The rest of new build, 1.2 GW, is nearly all battery storage.

But worst of all was the lack of interest of new build even to bid. Only 322 MW of new build exited the auction, mainly OCGT. This tells us that nobody is now prepared to even consider building CCGTs or other large scale generators. This is hardly surprising, given government threats to shut down all fossil fuel generation!

Of the 42.8 GW contracted, 28.6 GW is gas, begging the question of where our backup capacity will come from in 2030, if Labour win the election. Take away gas, all we are left with essentially are interconnectors: