Capacity Market reinstated: the industry responds

Caroline Bragg, head of policy, Association for Decentralised Energy: “The ADE welcomes the European Commission’s decision to re-instate the Capacity Market’s State Aid.

“Whilst undoubtedly not perfect, the Capacity Market has been an important revenue stream for decentralised energy and its suspension has caused considerable uncertainty during an already turbulent time in the energy system. We are encouraged by the areas where commitments have been made; including lowering the minimum threshold, access to longer-term contracts and the volume procured in the T-1 auction. These are all areas where the ADE has consistently argued for improvements.

“We will continue to work with BEIS and Ofgem to understand in more depth the implications of these commitments and make further progress through the ongoing 5-year review.”

 

Roger Miesen, chief executive, RWE Generation: ”The Capacity Market has proven that it can successfully delivert security of supply at the lowest cost to consumers . The Commission’s conclusion provides the necessary certainty to plant operators and is great news, because the Capacity Market is crucial for security of supply.

…”We are very pleased that the EU has concluded the investigation into the Capacity Market and as a result the mechanism will be fully reinstated and deferred payments backdated. The conventional power market in
Europe remains extremely challenging with large scale plants operating for shorter periods of time to support the transition to a low carbon energy system.”

 

Dr Jonathan Marshall, head of analysis, Energy and Climate Intelligence Unit: ”Despite the EC decision to give it the green light, serious questions persist on the necessity of a capacity market. There remains little evidence that it is needed to keep British lights on, there are major doubts if it is the right tool to deliver low-carbon electricity during the 2020s, and it continues to shut out innovative and disruptive technologies that are vital in the transition to a smarter, cleaner and cheaper electricity system.

“Without changing tack, the UK is now at risk of continuing to shovel cash towards old coal, gas and nuclear power stations, which would be running anyway, rather than clearing space for low carbon generation and innovative technologies to achieve their full potential, bringing energy bills down with them.”

 

Jamie Tabord, director: site services, Inspired Energy: “After a nearly a year of uncertainty, the EU Commission’s decision to reinstate the UK’s Capacity Market will result in a collective sigh of relief across the energy sector.

“It not only has a huge role to play in security of supply as it captures multiple areas of generation and flexibility, it is also used by a number of businesses as a revenue stream to help fund energy efficiency projects.

“With the focus on net zero and meeting stringent sustainability targets, reinstating Capacity Market will provide businesses with greater certainty in terms of managing supply, costs and carbon.”

 

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