Capacity Market and balancing services

Introduction

This is an overview of the key content to be found in our Energy subtopic Capacity Market and balancing services. It briefly explains the nature of this content and provides links to it.

Capacity Market

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Practice Note: Capacity Market—key features—looks at the Capacity Market (CM) under the electricity market reform (EMR) programme. It provides an introduction to the purpose and legal basis of the Capacity Market, explains what types of electrical capacity Capacity Market support is available to, how Capacity Market support is won, and the form that Capacity Market support takes. It also provides an overview of the key parties involved in the Capacity Market, the Capacity Market auctions that have taken place to date and the key Capacity Market legislation, rules, guidance and consultation documents. It include analysis of the annulment and subsequent re-confirmation of State aid clearance for the Capacity Market mechanism, following the General Court’s 15 November 2018 judgment in respect of Tempus Energy Ltd and Tempus Energy Technology Ltd v Commission

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Latest Energy News

NESO launches consultation on CSNP methodology

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Ofgem publishes decsion on commercial framework for Early Competition

Ofgem has published its decision on the commercial framework for Early Competition in onshore electricity transmission. The framework sets out how Competitively Appointed Transmission Owners (CATOs) will finance, build, and operate transmission assets. It includes key elements such as a post-award security obligation capped at £50m for projects up to £1bn, a 35-year revenue period, and a 98% availability target. The framework implements provisions of the Energy Act 2023 (EnA 2023) and will be incorporated into the CATO electricity transmission licence. Further consultation on specific implementation details is expected later in 2025.

NAO publishes report on the effectiveness of the UK ETS

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Danish Presidency of Council of the EU publishes presidency programme

The Danish Presidency of the Council of the EU has published its programme for 1 July to 31 December 2025, outlining its priorities and direction under the presidency's focus on ‘A strong Europe in a changing world’. The presidency aims to strengthen the EU’s capacity to act autonomously amid growing global instability by focusing on security, competitiveness and the green transition. Legislative efforts will prioritise bolstering defence, economic resilience, and climate neutrality. Additionally, the presidency seeks to reduce regulatory burdens and promote EU enlargement. Full details are available in the programme document and more details can be found below.