January 2020 Auction update

Storengy UK successfully sold all of the remaining storage capacity (840 GWh) for the upcoming storage year (2020/21) at last week’ auction. As with previous auctions, we had a wide variety of bidders taking part in the auctions from many areas in the industry, and numerous different countries. Interest in storage at our site continued to be high, with demand for almost nine times the capacity available at the auction for the coming year.

As with our auction in November, Storengy UK also offered capacity for the storage year (2021/22) at our auctions, and we were delighted to sell a further large amount of capacity, more than a year ahead of the start of this storage period. However, we saw a far lower level of interest in the auction for this capacity, with many bidders only bidding for capacity for the upcoming year and others not taking part in the auctions, as a result of the uncertainty in the market around the impacts of the Gas Charging Review and BREXIT.

Similar to our November auctions many interested parties expressed concerns over the uncertainty of the potential impact of the gas charging review, with Ofgem’ recent “minded to” decision providing further guidance around the timescales for changes, but still leaving a lot of uncertainty on likely effects of the changes. Again, this meant that many bidders took a more cautious approach in their storage valuations, whilst other interested parties did not place bids.

Please note that the reserve prices for the auctions are agreed internally prior to the start of the auctions. Neither these nor the bid prices are disclosed publicly.