Q&As

Rule 9.2.7 of the Capacity Market Rules 2014 states that transfers of capacity agreements made under rules 9.2.4(b), (c), or (d) may be to an acceptable transferees who is ‘the same entity as’ the person from whom the transfer of the capacity agreement is being made. What is this wording designed to capture?; the consolidated version of the Electricity Capacity Regulations 2014, SI 2014/2043, have not been updated to include all the amending regulations subsequently made. What is the position with this?

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Published on LexisPSL on 23/08/2017

The following Energy Q&A provides comprehensive and up to date legal information covering:

  • Rule 9.2.7 of the Capacity Market Rules 2014 states that transfers of capacity agreements made under rules 9.2.4(b), (c), or (d) may be to an acceptable transferees who is ‘the same entity as’ the person from whom the transfer of the capacity agreement is being made. What is this wording designed to capture?; the consolidated version of the Electricity Capacity Regulations 2014, SI 2014/2043, have not been updated to include all the amending regulations subsequently made. What is the position with this?

In answering this Q&A we have focussed our research on the Capacity Market Rules 2014 (including amendments effective as at today’s date) (CM Rules) and the provisions of the Electricity Capacity Regulations 2014, SI 2014/2043 (as amended) (CM Regulations, SI 2014/2043).

From our review of the consultations and guidance published by government, National Grid, Ofgem and the CM Settlement Body we cannot see a specific explanation given for the rationale behind the provision at CM Rules, r 9.2.7.

Subject to the caveat in the above paragraph, it seems to us logical to conclude the CM Rules, r 9.2.7 is looking to provide for the following scenarios under CM Rules, r 9.2.4(b)–(d):

  1. CM Rules, r 9.2.4(b)—this CM Rules permits a capacity provider who is the legal owner of a generating CMU to transfer all capacity agreements to a person who is (i) acquiring the CMU, or (ii) who is the despatch controller in respect of the CMU. Where a capacity provider is owner of a generating CMU (Entity A), and Entity A wishes to sell the CMU to a third party, there may be scenarios where nevertheless Entity A wishes to r

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