The government aims to secure 53.8GW of electricity in January next year to ensure there is enough power when demand is high during winter 2017/18.
Under the Capacity Market, power plant owners are paid to provide electricity at short notice especially when demand increases.
Two capacity auctions and the second Transitional Arrangements auction, which supports the Capacity Market, will take place this winter. They will secure the UK’s electricity supply for the winters of 2020/21 and 2017/18.
DECC intends to reserve 300MW of turn-down Demand Side Response as part of the Transitional Arrangements auction for 2017 and 52GW in the third auction – which will take place in December – for delivery in 2020/21. That’s 6GW more than the last auction.
The announcement follows a package of reforms to the Capacity Market, aimed at ensuring it continues to deliver energy security for consumers.
Energy Secretary Amber Rudd said: “We are taking the action needed to tackle the legacy of under-investment in our energy infrastructure, build a system fit for the 21st century and ensure our country’s long-term energy security.
“As part of this, the Capacity Market drives down costs and ensures we can meet our energy demand at the lowest possible price for bill payers.”