UK power capacity auction delivers 627 MW of battery storage
Britain’s T-1 Capacity Auction for delivery in the 2023-24 period saw battery energy storage technology emerge as the third-biggest winner in terms of secured contracts, following gas and nuclear. Batteries accounted for more than a half of the new build capacity.
Britain’s T-1 Capacity Auction 2023-24 has awarded contracts to 627 MW of battery energy storage projects, up from 385 MW last year. The National Grid said in a provisional auction document that a total of 5.78 GW were procured. Of the 6.12 GW of capacity in the auction, 94.42% of projects secured agreements for making supplies available at short notice.
The auction cleared at GBP 60 ($73.07)/kW per year on Tuesday, representing the second-highest clearing price thus far, after the record-breaking price of GBP 75/kW per year recorded last year. Battery energy storage projects accounted for 10.9% of the total awarded capacity, followed by 2.6 GW of gas-fired power plants and 1.4 GW of nuclear capacity.
About four-fifths of the capacity procured in the auction across 269 capacity market units (CMU) was from existing power assets, the auction results showed. Battery storage projects won 74 contracts, and most of that will come from newly built projects. Only 60 MW of the 627 MW of awarded capacity will come from existing generating CMU. Of the new build capacity that won contracts, 54%, or 568 MW, came from batteries, up from just 261 MWlast year.
Nearly a half of all battery projects have one-hour durations, while about 40% are two-hour systems. The list of winning storage developers includes Alkane Energy, Conrad Energy, Gore Street, Gresham House, Gridserve, Harmony, Infragreen, Pivot Power, Pulse Clean Energy, SMS Energy Services, SUSI Storage, and Tagenergy UK.
Britain’s key capacity auctions are usually held about four years in advance of the delivery date, in so-called T-4 auctions. Up to 15-year contracts are available for new-build capacity in these auctions, while existing capacity can only secure one-year contracts. Other auctions for a smaller amount of capacity, the so-called T-1 auctions, are usually held a year before delivery, with only one-year contracts up for grabs.