Government extends window for Capacity Market ‘top-up auction’

The timeframe for the proposed auction will now be open until the end of August “as a contingency measure”

Electricity pylon

The government has extended the window of its proposed T-1 top-up auction until the end of August “as a contingency measure”.

That’s according to the Department for Business, Energy and Industrial Strategy, which has published the results of a consultation regarding the Capacity Market mechanism, which was suspended at the end of last year.

The consultation received a total of 61 responses from a range of stakeholders, including generators, developers, suppliers, trade associations, investors and providers of Demand Side Response.

When the Capacity Market was halted, the government and National Grid had to abandon plans to hold a T-1 auction in January, which would have aimed to procure additional capacity.

A T-1 auction aims to procure the capacity required to meet peak demand, through a series of competitive auctions held one-year in advance.

The government previously planned a top-up auction for this summer and has now outlined how this will be run.

It says it will proceed with making the necessary legislative changes to conduct the replacement T-1 auction and allow capacity providers “greater flexibility in dealing with forthcoming milestones affected by the standstill period”.

For instance, suppliers will not be subject to mandatory payments to meet Capacity Market levies while the market is suspended, although they will be invoiced and have to pay within a few weeks of it being reinstated.

The government has also announced it plans to broaden the Secretary of State’s discretion with regard to dealing with termination and non-completion notices.

Latest Podcast