Developers of electricity transmission lines that link the UK to its neighbouring countries will now be able to bid for contracts to offer back up power at times of peak demand.
DECC has confirmed it will allow interconnectors to participate in the Capacity Market from 2015, which it hopes will boost competition and drive down costs for consumers.
The UK’s Capacity Market, which was approved by the European Commission earlier this year, will run for 10 years.
Britain aims to auction a total of 51.1GW of capacity for the first delivery year in 2018/19, out of which 48.6GW will be auctioned this month.
Energy Secretary Ed Davey said: “We’re working tirelessly to get the best possible deal for British bill payers and that includes linking us to other countries so that energy companies can buy low carbon electricity from wherever it’s cheapest.
“Including interconnectors in the Capacity Market from next year shows the strongest signal yet to potential investors.”
Interconnector projects currently in the pipeline represent around £5 billion of private sector investment by 2020, according to DECC.