Case Study: One Small Step for UK Energy Capacity
The UK's capacity market auctions are intended to ensure security of electricity supply. The most recent auction, while successful in awarding contracts for new generating capacity, was far from the giant leap that many were expecting.
The auction was the third annual winter competition for energy generators to bid to secure contracts for their facilities under the UK government's Capacity Market mechanism.
The mechanism was introduced to encourage the construction of new generating plants and to secure the security of supply for the UK energy demand.
The previous two auctions have failed to deliver meaningful new build capacity, with the majority of capacity secured – 49.26 gigawatts (GW) in December 2014 and 46.3 GW in December 2015 – coming from existing generating facilities.
In the case study below, Peter Hughes, Black & Veatch`s Director of Business Development for energy in Europe, considers what is necessary to ensure the system creates a more robust energy supply.
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