The provisional results are out for the auction of the 50 GW of capacity required to provide balancing services to National Grid from the winter of 2021/2022. Compared to the last such auction, in December 2016, there has been some dramatic changes, with the most striking being the clearing price dropping to £8.40 per kW/yr, compared to £22.50 for the year 2020/21. This indicates that there has been a fundamental change in the type of generation that has been successful. The majority of the capacity (86%) procured was for existing generation plant, compared to only 1.5% for new build generating capacity. In addition, the greatest proportion of this capacity is to be filled by one year contracts for existing gas powered combined cycle gas turbine plant (46%), with nuclear plant making the second greatest capacity awarded (16%). In light of these results, it is difficult to see how new build generating capacity could be competitive and therefore successful in future auctions of this type.
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