Peterhead power station loses out in capacity auction

Peterhead was among several SSE plants to miss out in the auction

SSE has said existing operations at Peterhead power station will not be affected, despite losing out on a capacity auction designed to avoid blackouts in future years.

The government's first capacity market auction saw power firms secure more than 49GW of electricity generation capacity.

SSE won agreements to provide a total of 4,409MW of capacity for 2018-19.

But several SSE plants, including Peterhead, failed to win contracts.

The backup capacity market aims to ensure power is available when intermittent renewable energy sources fail to produce electricity.

SSE said it was pleased that the majority of its plants had been successful in the auction, which was run by the National Grid.

'One option'

A spokesman said: "Whilst we would have preferred to get a contract for Peterhead, the capacity market is just one option available to the station.

"This auction was for contracts starting in 2018 and doesn't affect existing operations.

"Peterhead currently has a Supplemental Balancing Reserve (SBR) contract with National Grid which could be extended.

"There's the option of entering the station into next year's capacity market auction and we are continuing to develop the pioneering carbon capture and storage project at the site, in partnership with Shell.

"We will continue to analyse market conditions and opportunities for all our plants going into next year's capacity market auction and beyond."

He added: "These include future Capacity Market auctions, future SBR tender rounds, contracts with National Grid, and business-as-usual operation in the market."

As a result of the auction, power generation firms are to receive close to £1bn to ensure their plants stay open and prevent the lights going out in the coming years.

It will add around £11 to the average household energy bill.

The auction will provide power for the year 2018-19.