(Bloomberg) -- Running hours of gas-fired power plants in the UK are at the lowest since at least 2017 as wind, solar and imports from Norway and France flood the grid.
In 2024, even during the most profitable hours, less than half of combined cycle gas turbines capacity were online, according to analysis by Kilowatt.io, a UK-based solar data company.
“Surprisingly, over half of the time this year, only around 20% of the CCGT capacity has been in operation,” Ben Watts, developer at Kilowatt.io said in a post on LinkedIn.
Britain, like other nations in Europe, needs a supply of ready-to-use power for days when renewable output is low. Gas plant owners receive a capacity payment in the UK for keeping facilities available even if they don’t generate and this is topped up by selling power to the market. The less the stations run, the more money they require from the government to stay profitable.
In short, gas stations are needed less but are crucial when they do run. That highlights the challenge faced by grid operators around the world of how to remunerate plants for keeping the lights on.
In Germany, gas-fired power plants are loss-making throughout the year. Even in January and February, which are typically the coldest months, gas plants are unprofitable, according to spark-spread calculations.
Germany’s goal is to get 80% of its electricity from green sources by 2030. Last year the share of power generated by renewables rose to 56% - 10% more than the year before. Still, build-out is slowed down by red tape and supply issues.
Germany is also phasing out coal and is planning a massive expansion of gas power plants. The government wants to introduce a capacity market to subsidize the build out. It’s expected to be rolled out by 2028.
--With assistance from Carolynn Look.
©2024 Bloomberg L.P.
