OREANDA-NEWS. National Grid has today announced that a total of 62.5 Gigawatts (GW) of derated electricity generation capacity has successfully qualified to bid in this December's Capacity Mechanism auctions.

The Capacity Mechanism prequalification process is part of Electricity Market Reform which was brought in by the Energy Act earlier this year and will procure electricity generation capacity for the winter of 2018/19. The Capacity Mechanism, developed by the Department for Energy and Climate Change (DECC), is designed to create confidence in investing in generation while keeping costs competitive.

A total of 52.4GW of derated capacity has pre-qualified with just over 10GW qualifying on the condition they provide extra information regarding their project development such as planning consents. A just under 9GW (derated) of new build generation has qualified, however that may increase following the appeals process.

National Grid is the Delivery Body for EMR and will administer and run the auction on behalf of DECC. The auction process aims to secure a total of 53.3GW (derated) of new and existing generation capacity and demand side response for 2018/19. The vast majority was expected to be secured in this year's auction in December 2014 with a second auction, held a year ahead of when it is required, providing the rest.

Generators totalling 5GW failed to meet the qualifying criteria set by DECC. These Applicants have 5 days to request we change our decision and provide the relevant documentation to support their request. We then have 5 days to consider this. If we uphold our decision they then have 5 days to submit an appeal to Ofgem who will look at each case individually.

8GW of derated generation capacity opted out, meaning they will not participate in the December auction. However, 'opting out' of the auction does not mean that they cannot continue to participate in the market.

The results of the auction will be announced by DECC on 5 January 2015.