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T-4 capacity auction in GB - provisional results

11 Mar 2021

The provisional results of the latest T-4 capacity auction in Great Britain were published on Wednesday 10 March, with a total of 40.8GW in capacity contracts awarded to electricity generators at an auction clearing price of £18/kW.

SSE is pleased to have secured contracts for 1,892MW of gas-fired generation and 890MW of pumped storage and hydro capacity for the delivery year 2024/25, as well as a 15-year contract for 3MW at its new-build Gordonbush Extension onshore wind project*. Additionally, the Slough Multifuel energy-from-waste project, which is co-owned by CIP and set to become operational in 2024, has received a 15-year agreement for 42MW of de-rated capacity.

However, SSE is disappointed to note that its existing Keadby 1 and Medway power stations, which continue to provide essential flexible and reliable power to the system, did not secure an agreement in this auction. These results will not impact existing operations at the stations, which currently have contracts in place until September 2022, and will have opportunities to secure further capacity agreements in future auctions.

SSE’s new Keadby 2 Power Station received a 15-year contract in the previous T-4 auction and is therefore already contracted for the year 2024/25.

"“While we are pleased to have provisionally secured contracts for new and existing capacity in this auction, we are disappointed that our Keadby 1 and Medway power stations did not secure agreements on this occasion. These power stations continue to play an essential role in ensuring security of supply across the UK and providing the necessary flexibility to support continued growth in renewables.

“Looking ahead it’s clear the UK will continue to need flexible generation on the system, and that capacity will need to be compatible with net zero well ahead of 2050. To that end, we must now take the opportunity to accelerate the delivery of new low-carbon thermal power stations, using CCS and hydrogen solutions. SSE also has options in other flexible technologies, which can play a critical role in balancing a net zero system, such as pumped hydro storage.”"

Martin Pibworth Energy Director

*A de-rating factor is applied to all capacity according to rules set by the UK Government. The 2024/25 delivery year runs from 1 October to 30 September.