The deals were signed following 2020/2021 UK Capacity Market auction aimed at ensuring continuous and reliable energy supply during high demand, such as winters.
The auction has resulted in a lower-than-forecast price of £22.50kW/year and is estimated to have a net cost of around £2 per year on average for consumers in the long term.
Centrica, Drax, EDF Energy, E.ON, RWE, ScottishPower, SSE and Uniper are among the firms which signed the capacity agreements.
UK Business and Energy Secretary Greg Clark said: “Our homes and businesses need an electricity supply they can rely on all year round. We’ve provided them with that certainty, at a low cost to bill payers, years in advance.
“Technological innovation, as part of our low carbon future, will create jobs and opportunities across the UK.
“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.”
In addition to involving a range of new generation, including new gas power stations in Kings Lynn and Spalding, the Capacity Market auction resulted in signing agreements for flexible, low-carbon battery storage for the first time in the market wide auction.
As one of the auction winners, Centrica signed a 15-year agreement to develop two 50MW fast response distributed generation gas-fired power generation facilities in North East Lincolnshire and Cambridgeshire.
It will also build a 370MW combined cycle gas turbine at King’s Lynn in Norfolk as well as a 49MW battery storage facility at Roosecote in Cumbria.
Expected to be one of the world’s largest of its kind, the battery storage facility will be capable of holding enough electricity required to power around 50,000 homes.
Image: Illustration of the Centrica’s proposed Roosecote battery storage in Cumbria, UK. Photo: courtesy of Centrica plc.
