The Capacity Market Rules
The Capacity Market Rules

The following Energy practice note provides comprehensive and up to date legal information covering:

  • The Capacity Market Rules
  • Introduction to the Capacity Market Rules
  • The process for making and amending the Capacity Market Rules
  • Government
  • Ofgem
  • Practical guidance on the Capacity Market more generally
  • Current and past versions of the Capacity Market Rules

Note: on 15 November 2018 payments under the Capacity Market mechanism and future Capacity Market support were suspended. This came as a result of the General Court issuing its judgment in Tempus Energy Ltd and Tempus Energy Technology Ltd v Commission (Tempus Judgment (see LNB News 15/11/2018 90 for analysis of the judgment itself)), annulling the Commission’s decision of 23 July 2014 which found that the aid scheme establishing a capacity market in the UK was compatible with the EU rules on State aid. For detailed analysis and links to further resources on this, see Practice Note: Capacity Market—key features—Suspension of the Capacity Market following the Tempus State aid judgment (15 November 2018). On 24 October 2019, the Commission re-confirmed its original July 2014 decision to grant State aid approval for the GB Capacity Market, enabling it to be restored and payments that have been suspended since November 2018 to be made. As a result of this development, this Practice Note is currently under review.

Introduction to the Capacity Market Rules

The Capacity Market has been implemented by government to ensure there is sufficient commitment/investment by the private sector in providing reliable electricity capacity, so as to ensure ongoing sufficient electricity supplies in Great Britain.

Following lengthy consultation, the Capacity Market was implemented pursuant to powers in the Energy Act 2013 (EA 2013). As set out

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