Second flexibility CATs auction cancelled due to lack of interest

A second and final auction offering flexibility CATs through a transitional mechanism that was endorsed last summer by the European Commission has been cancelled following insufficient interest displayed by gas-fueled producers, who deemed capacity amounts on offer were too small.

Authorities officially attributed the cancellation to a delayed ministerial decision that was needed for the second auction’s staging. But the lack of interest shown by producers with gas-fueled units in their portfolios was at the heart of the matter.

Some sector officials have contended that, given the limited capacities offered, the cost of participating in this second auction may have outweighed any prospective financial benefits.

The transitional mechanism’s second flexibility CATs auction was planned to cover the period running from January 1 to March 31.

According to regulations set for this transitional mechanism, flexibility auctions needed to be staged within the first seven working days in the month following the month of the balancing market’s launch.

Given that the balancing market was launched on November 1, as part of the target model launch, the second auction for flexibility CATs should have been staged by December 7, and, furthermore, a ministerial decision was due by November 7.

Offers submitted by the operators of gas-fueled power stations and hydropower stations fully covered a total capacity of 4,500 MW that was made available at the transitional mechanism’s first flexibility auction, held on October 29. Its flexibility services covered the period running from November 1 to December 31.