Government proposes reforms to electricity capacity market

The consultation aims to support the UK’s ambition to fully decarbonise its grid by 2035

Big Zero Report 2022

The government has today launched a consultation on proposed reforms to the UK’s capacity market.

The capacity market, which involves competitive auctions, ensures the security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when there is high demand.

The proposed changes are designed to drive more investment in clean energy technologies, including energy storage systems, carbon capture, utilisation and storage and hydrogen power.

The proposals include new contracts for flexible capacity, such as smart ‘demand side response’ technologies and smaller-scale electricity storage and a new lower emissions limit which will kick in for new build plants from 1st October 2034.

Energy and Climate Minister Graham Stuart said: “As we move towards cleaner and cheaper energy, it is essential that the UK provides secure and affordable energy for all.

“The plans set out today will deliver this reliable energy and ensure the scheme that sits at the heart of Britain’s energy security is fit for the future.”

RenewableUK’s Chief Executive Dan McGrail said: “We need to incentivise more investment in new low carbon flexibility in our modern energy system based on renewable technologies, including wind, solar, tidal stream and green hydrogen.”

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