According to Cornwall; pay-outs to electricity generators that will make sure Britain’s power supply remains secure, could reach a new high.
At the end of January, the government will invite power stations and demand response providers to bid for contracts that will give them revenue streams in return for them being available to the power system for winter 2017/18. The auction is being held because of concerns that major power station closures will narrow the gap between the electricity generated and the electricity needed for consumers.
In its report, Cornwall has stated that the cost of the contracts (which are recovered through consumer bills) was likely to be higher than previously given as part of the capacity market scheme. This would be driven by the contract auction being held just year before the power may be needed by the system, which means that cheaper new build projects will not be operational in time. This means that less efficient, older power stations will determine the contract price.