The Capacity Market is its main tool for ensuring that electricity remains available during times of high demand, such as dark winter evenings.
This winter two Capacity Market auctions and the second Transitional Arrangements auction (which supports the Capacity Market) will take place, securing UK electricity supply for the winters of 2020-21 and 2017-18.
The Government intends to buy:
- 8GW in the early capacity auction for delivery in 2017-18
- 300MW of turn-down Demand Side Response in the Transitional Arrangements auction for delivery in 2017-18
- 52GW in the T-4 auction for delivery in 2020-21
The auction parameters set out the amount of capacity that DECC are looking to secure in these auctions.
Three Capacity Market auctions will take place this winter:
The third T-4 auction, for the delivery year 2020-2021, will take place in December 2016.
Earlier this year, the Government announced that it will hold an early auction for the delivery year 2017-2018. This auction is due to take place in January 2017.
The second Capacity Market Transitional Arrangements auction, for delivery of capacity in 2017-18 will take place in March 2017.
Frank Gordon, Senior Policy Analyst at the Renewable Energy Association, commented: “The news that 5GW of conventional power plants missed their delivery deadlines under the Capacity Market programme shows that a disturbing lack of new capacity is being built at present.
“Renewables offer a more sustainable form of power production and the opportunity to grow new industry in Britain. Government support schemes such as the Capacity Market must be reformulated to focus on renewables, such as biomass, wave and tidal, wind and solar.
“Renewables are the only form of power generation that have been delivering new capacity at any scale in recent years so the Government’s best chance of ensuring supplies and meeting legally binding renewable and emissions targets is to better support this sector.”
The REA also said the auction should be reformed to better support innovative energy storage projects which could offer greater system stability and enable the roll out of more solar and wind power, alongside other low carbon options.