Partial success for SSE in bids for winter power contracts

Perth-headquartered utility SSE has secured contracts worth tens of millions to help keep the UK’s lights on in future.

However, the group was only partially successful in the UK Department for Energy’s latest capacity market auction relating to power provision for winter 2020/21.

It had originally bid for more than seven gigawatts of de-rated capacity but eventually secured agreements relating to 3.2 GW, including 873MW of hydro electric capacity and 2.3GW of gas and embedded power generating plant.

The group’s Peterhead gas station was among SSE sites that missed out.

SSE told investors: “The total value secured by SSE is £72.9 million. The revenue will be received on a pro-rated basis throughout the delivery year.

“The results do not impact existing operations at any of SSE’s operational stations, all of which will be available this winter.

“SSE will continue to analyse market conditions and opportunities for 2017 and beyond, including the Early Capacity Auction in January 2017 for delivery in 2017/18 and business-asusual operation in the market.”

Scottish-Power also secured various contracts relating to 2.3GW of capacity, while the new build combined heat and power plant at Grangemouth picked up a single contract for 128.2MW.

The Department of Business, Energy and Industrial Strategy said a total of 52GW of capacity had been contracted for winter 2020/21.

For the first time, battery storage was among the sources which secured agreements in the third annual auction.

The auction cleared at a below forecasted price of £22.50 per kilowatt hour, meaning taxpayers are facing a net extra cost of £2 per year to secure the extra provision.

Business and Energy Secretary Greg Clark said security of supply was vital but modernising the energy network was also a key aim.

“Technological innovation, as part of our low carbon future, will create jobs and opportunities across the UK,” Mr Clark said.

“We are rebuilding an archaic energy system, bringing forward brand new gas power and innovative low-carbon capacity like battery storage to upgrade our energy mix.

“This is about more than just keeping the lights on.

“A modern, reliable, and flexible electricity system powers the economy and Britain’s future success.”

The Department of Energy has secured power capacity for winter 2020/21.