Battery storage wins contracts in UK capacity market auction

Battery storage has for the first time won contracts in the UK capacity market auction mechanism, the Department for Business, Energy and Industrial Strategy (BEIS) said on Friday.

The third annual four year ahead auction secured 52.4 GW of electricity capacity to ensure demand from homes and businesses is met in the winter of 2020/21. This includes 3.2 GW of energy storage, or 6.11% of the total. About 500 MW of new-built battery storage projects were awarded contracts.

Among those are Centrica's (LON:CNA) 49-MW battery storage project at Roosecote in Cumbria. Centrica confirmed it will build the facility after securing a 15-year capacity market agreement. EDF Energy also got a 15-year agreement for 49 MW of new battery storage at West Burton.

The auction cleared at GBP 22.50 (USD 28.3/EUR 26.8) per kWh, which according to BEIS is lower than most forecasts.

Business and Energy Secretary Greg Clark said the auction is about more than just keeping the lights on. "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," he said. Two new gas power stations in Kings Lynn and Spalding will be built as a result of the auction.

(GBP 1.0 = USD 1.258/EUR 1.191)

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