RWE Generation UK statement on the T-4 UK capacity auction
As previously announced on 9 February, The Electricity Market Reform (EMR) Delivery Body, National Grid, has now confirmed that this year's UK T-4 capacity auction cleared at £8.40 /kW/year. 50,415.403 MW have been secured for the UK for delivery in 2021/2022.
National Grid has released the confirmed results stating the UK assets which have successfully secured an agreement, which you can view here. The auction ran from 6 February and closed on 8 February.
This announcement confirms that RWE Generation has secured one year agreements for most of its existing eligible sites that were entered into the auction with the exception of Aberthaw and new build sites at Grimsby B, Ferrybridge, Cheshire and Hythe. This means we have 6,637 MW of capacity agreements for the 2021/22 delivery year.
RWE’s Aberthaw station has a key role to play in providing the UK with security of electricity supply over the next years. We have important obligations to meet in relation to previous capacity market auctions. The possibility of future T-1 capacity auctions and the energy, ancillary service and balancing markets could also provide future operating options for the station, even beyond current capacity market commitments, if demand and economics indicate a case for this.
Despite a challenging environment, the team at Aberthaw Power Station has achieved impressive results in recent times. Most recently, working on the high volatile coal conversion project and subsequently meeting proving runs for the current Capacity Market on all units. This level of expertise and team work will be critical to deliver the station’s performance in coming years.
Although our new build sites at Grimsby B, Ferrybridge, Cheshire and Hythe did not secure an agreement, we are comfortable with this position, which reflected our bidding strategy, and may consider potential options for entering them into future capacity auctions.
We will now need some time to assess the impact on our business. As always, our people are our top priority and any decisions we might take in future on our portfolio would always be shared with those affected at the earliest opportunity.
RWE Generation represents security of energy supply and can produce around 8.5 GW hours of electricity in the UK, where it operates some of most modern and efficient plants in the country. As the second largest electricity generator, it produces around 15% of the UK’s electricity.
RWE Generation operates its plants safely, efficiently and on a cost-effective basis and has exciting plans to invest further in the UK including the development of other sites.