EU’s Clean Energy Package – and Brexit delay – will drive new diesel out of Capacity Market

Provisions in the  EU’s Clean Energy Package, which enters into force today and will be adopted by the UK because Brexit has not yet taken effect, has driven diesel plant out of future Capacity Market auctions, along with other high carbon sources. 

Article 22 of the package, which outlines design principles for capacity mechanisms, outlaws new and existing generation from joining CM auctions if their carbon dioxide emissions are higher than 550g/kWh and (at a later date) more than 350kg per year per kWe.

BEIS said it would introduce changes to the Capacity Market Rules prior to the opening of this year’s prequalification window to implement these provisions, which will initially impact new-build generation. It said, “These changes will have the effect that any capacity that does not meet the emissions limits (principally coal and diesel generation) and has not started commercial production before today’s date will be unable to prequalify for future auctions.”

BEIS will consult on implementing the provisions for refurbishing and existing generation, incuding that already participating in the CM and receiving payments, saying these will require more technical work. But agreements already in place  (including Conditional Capacity Agreements, and long-term agreements) will not be affected.

The full text of the regulation can be found here: https://eur-lex.europa.eu/eli/reg/2019/943/oj

Further reading

Search and sort data on UK power assets via New Power’s online Database. Free access for subscribers

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