UK Capacity market may have bottomed. Ofgem and NG ESO worried by the market reaction to their recent policy stance perhaps?
On 20 February 2024, six of the Company’s BESS assets successfully bid for T-1 Capacity Market contracts for delivery from 1 October 2024 through to end September 2025. The auction cleared at £35.79/kw/yr, lower than last year but higher than the Company’s expectations. Once de-rating is taken into account, this increases the Company’s contracted revenue for this period to £3.2 million (circa £8k/MW), of which £1.7 million has not yet been factored into the Company’s modelled cash flows.
Together with a refinancing at a lower rate they might even reinstate dividends soon.