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United Kingdom

Value of green energy rises with fossil prices

High power prices in the UK electricity market have boosted the value of green energy far beyond all previous levels. The Non Fossil Fuel Purchasing Agency (NFPA), in its latest on-line auction of renewable electricity in August, secured a record average price for capacity of £0.141405/kWh, 51% above the level of the last equivalent auction covering a winter period, which returned an average of £0.0931/kWh. The NFPA was auctioning electricity to be generated from October 1, 2008 to March 31, 2009. A total 286 projects with a combined capacity of around 875 MW were auctioned. Most of the output is from plants contracted under the now obsolete Non Fossil Fuel Obligation and Scottish Renewables Obligation support systems, but some projects were auctioned directly on behalf of generators. The output was secured by eight electricity retailers. The prices paid cover the electrical output plus Renewables Obligation Certificates (ROCs), Climate Change Levy Exemption Certificates and Renewable Energy Guarantees of Origin. Wind secured an average price of £0.1369/kWh, while the highest average prices went to hydro and landfill gas at £0.1428 and £0.1481/kWh, respectively. Jacqueline Hudson from the NFPA points out that auctions covering the winter period always command higher prices. "But we were pre-warned that these winter prices would be particularly high," she says. She adds that in July's auction of ROCs only, the average price paid for ROCs also reached record levels of £53.27/MWh.

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