LONDON (Reuters) - British utilities SSE (L:SSE) and Centrica (L:CNA) are among companies that have qualified for participating in the country's first electricity capacity auction, auction manager National Grid said on Friday.
Britain's largest coal-fired power producer Drax (L:DRX) and French state-owned nuclear power producer EDF (PA:EDF) also qualified for the auction, which is set for Dec. 16.
It is designed to ensure enough back-up power is available to complement intermittent renewable energy sources and will allocate 50.8 gigawatts (GW) of power capacity for the winter of 2018/19.
Firms capable of generating a total of 62 GW of capacity have successfully qualified, National Grid said in an emailed statement.
Around half of the qualifying generation comes from gas-fired power plants, with less than a quarter from coal-fired plants, National Grid documents showed.
Successful bidders will be paid a price agreed at auction for holding their capacity on standby and will receive a premium if their capacity is called upon.
The results of the auction will be made public on Jan. 5.
Capacity markets have divided the opinions of European Union energy ministers, but France and Germany are now also considering setting up such frameworks to complement growing renewable energy production.
Europe's utilities are largely in favour of capacity markets because guaranteed payments will help generators make profits on some loss-making thermal power plants.
(Reporting by Karolin Schaps and Susanna Twidale; Editing by Pravin Char)