Discussion > Putting the Capacity Auction Price In Context
“Whom the gods would destroy they first make mad.”
A quotation that does seem more and more apposite in these strange times.
Dec 19, 2014 at 2:18 PM |
Radical Rodent
Radical Rodent
What I want to know is could I get paid now for promising back-up? Or have I misunderstood?
O.K., I don't actually have a working power station and the staff to run it should it be needed, but I can still make the same promises if the price is right.
Dec 19, 2014 at 3:15 PM |
michael hart
michael hart
So DECCs auction for backup capacity for 2018/19 resulted in a price of £11.40/KW of backup.
To put this in context, if I promised to turn off my 3KW kettle whenever DECC asked during the winter, then DECC would pay me 3 x £11.40 = £34 upfront, plus an additional payment depending on how many hours they asked me to keep it off for.
By contrast, running the kettle freely for 10 minutes every day should only really cost 3kW x £50/MWh wholesale / 1000 x 365days x 10mins / 60 = £9
So DECC have found a way to quadruple the cost of my cuppa. Madness.