SSE wins £172m contracts in UK power auction

Perth-based SSE plc was the biggest winner after the UK Government awarded about £375 million of contracts at record high prices to power plant owners to help to maintain UK energy levels next winter.

Bloomberg reported that SSE will make £172 million from contracts it won in the auction that cleared at £75 a kilowatt per year, citing calculations using National Grid Plc data.

The capacity target for next winter was raised after it became clear that some power stations with a four-year contract were now unable to fulfill their obligations.

SSE put forward gas units for the auction, Bloomberg reported.

SSE controls about 42% of the capacity bidding and it has a “very strong hand” in setting the price, said BloombergNEF analyst Andreas Gandolfo.

SSE said in a statement: “The provisional results of the latest T-1 capacity auction in Great Britain were published on Tuesday 15 February, with a total of 4,996GW in capacity contracts awarded to electricity generators at an auction clearing price of £75/kW.

“SSE Thermal has provisionally secured contracts for 2,293MW of de-rated electricity generation capacity for the delivery year 2022/23, which runs from 1 October to 30 September.

“This includes its Keadby 1 (723MW), Keadby 2 (812MW) and Medway (668MW) gas-fired power stations, as well as its smaller embedded plants at Burghfield (45MW) and Chickerell (45MW). All of SSE Thermal’s other generating units have existing contracts for 2022/23.

“The provisional results are subject to confirmation by the Secretary of State for Business, Energy and Industrial Strategy (BEIS).”

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