The cost of keeping the lights on will more than triple next year through a new subsidy designed to keep energy plants running. UK energy consumers will be forced to pay £378m through their energy bills to support the Government scheme which offers contracts to power plants to guarantee that they will produce power. The contracts will be awarded to the a power plants which offered the lowest fees through a capacity auction which ended on Friday and will pay for 54GW of power at a price of £6.95 a kilowatt. The cost will dwarf the £120m price paid for a modest reserve bench of 3GW of power supplies for this winter, maddening critics who claim that millions of pounds will be paid to polluting power plants which would have been running anyway. Through the auction over 96pc of power will come from existing power plants and interconnectors while only 3pc will be sourced from new projects. A tiny minority of payments will be made to companies which reduce demand.
Telegraph 3rd Feb 2017 read more »
Coal-fired power generators were among the winners of contracts worth £378m to generate electricity next winter, highlighting the tension between government efforts to reduce carbon emissions and the need for energy security. Gas-fired power stations secured the biggest share of contracts — almost 40 per cent — in the capacity auction held by National Grid, the UK electricity system operator, to ensure adequate supplies during the winter months when demand is highest.
FT 4th Feb 2017 read more »