SSE falls short of target in power generation bid
Power generator and retailer SSE has not won all the generation business it wanted in a UK energy generation capacity auction.
Electricity
9,616.83
09:34 19/03/24
FTSE 100
7,721.93
09:55 19/03/24
FTSE 350
4,260.60
09:55 19/03/24
FTSE All-Share
4,217.58
09:55 19/03/24
SSE
1,601.00p
09:55 19/03/24
SSE said it had secured agreements to supply 4,409 megawatts of power from October 2018 to September 2019 at a price of £19.40 per kilowatt.
But it said 2,796 megawatts of capacity did not secure an agreement, including power stations at Abernedd, Ferrybridge, Peterhead and one unit at Fiddler's Ferry.
SSE said the results would not affect existing operations at Fiddler's Ferry, which is fully operational, Ferrybridge, which has recently returned both of its units to the market following a fire in July, or Peterhead, which holds a contract with National Grid through the supplemental balancing reserve (SBR) mechanism.
"All three stations will therefore be available and/or generating this winter and SSE will continue to analyse market conditions and opportunities for 2015 and beyond," SSE said.
"These include future capacity market auctions, future SBR tender rounds, contracts with National Grid, and business-as-usual operation in the market.
"SSE's Abernedd project has been 'shovel-ready' for some time but, due to the challenging market conditions for gas plant and uncertainty about the capacity market, a final investment decision has not been possible. The outcome of the auction means this position hasn't changed."
SSE also said it would need to make more efficiency savings after regulators decided to reduce the amount SSE gets from household bills under the electricity price distribution review for the eight years from 1 April 2015.
The distribution share of the average household bill in SSE's Scottish Hydro Electric power distribution area will fall by about £27 next year and in the Southern Electric power distribution area by about £18.
Meanwhile, British Gas owner Centrica said its Langage and South Humber gas-fired power stations had won one-year capacity agreements starting in October 2018.
All the capacity agreements are subject to final confirmation from the Department of Energy and Climate Change (DECC).
DECC’s approval is expected no later than 5 January, the company said, while receipt of the capacity agreement notice is expected to be finalised within the first month of 2015.
Centrica shares were down 0.66% 270.30p at 08:54 on Friday. SSE fell 29p or 1.76% to 1619p.