Policy paper

Selective overcompensation in the Capacity Market

Consultation on an issue around fairness and competition in the Capacity Market auctions.

• From: Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy
• Published: 27 September 2016
• Last updated: 16 November 2016 — See all updates

This was published under the 2016 to 2019 May Conservative government

Documents

Selective overcompensation in the Capacity Market - detail

PDF, 109 KB, 6 pages

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Selective overcompensation in the Capacity Market - letter

PDF, 130 KB, 2 pages

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Indicative drafting for purposes of consultation

PDF, 346 KB, 6 pages

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Government response to Capacity Market consultation letter

PDF, 214 KB, 6 pages

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The Capacity Market (Amendment) (No.3) Rules 2016

PDF, 257 KB, 10 pages

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Details

On 15 November 2016, following a review of the responses to the consultation published on the 27 September, the Government laid the Capacity Market (Amendment) (No.3) Rules 2016 before Parliament. These Rules will come into force from the 21st November 2016. A copy of the rules, and a letter setting out the Government’s Response, can be found above.

In March 2016, the Government consulted on an exclusion from future CM auctions of projects that have used investment through risk finance schemes. In our response to this consultation, however, we noted that an outright exclusion may create risks to auction liquidity. We therefore now propose to offset investment received through risk finance schemes and spent on prospective capacity, from Capacity Market payments. This will ensure that those projects that have not had support through a risk finance scheme are able to compete fairly.

Published 27 September 2016
Last updated 16 November 2016 + show all updates

1. 16 November 2016

   Response letter and .Capacity Market (Amendment) (No.3) Rules 2016.

2. 27 September 2016

   First published.