The Capacity Market is open to all capacity providers including new and existing power stations, electricity storage plant, capacity provided by voluntary demand reduction and, from 2015 onwards, interconnectors.
In recent declarations, the Rt Hon Claire Perry MP Minister of State at the Department for Business, Energy and Industrial Strategy said that the Government plans to carry out a formal review of the capacity market considering whether to open it to renewable energy technologies. This will take place later this year and will also look at penalties, contract lengths, and access for new technologies, including renewables.
Renewables have an important role in the economy and energy market. By allowing renewable technologies to compete in the capacity market auctions would be a positive step towards securing a low carbon generation and providing demand reduction and diversity. However, if this change is approved it would be unlikely to be implemented in time for the next auction.
Next steps
The last results of the capacity auction were released on the 30th January 2018 and 6th February 2018 for T-1 (2018-2019) and T-4 (2021-2022) respectively. Deadlines to submit 6-month progress reports are 30th July 2018 for T-1 and 06th August 2018 for T-4.
From the date of the Capacity Auction, construction progress reports are required at 3, 6 and 9 months and thereafter every 6 months until the Substantial Completion Milestone has been met. A 6-monthly progress reports must include an assessment by an Independent Technical Expert (ITE) providing an overview of the construction progress and a remedial plan (if the delays to the construction plan impact the start of the delivery year). Reports must be completed for each Generating Unit comprising a Capacity Market Unit (CMU) and be carried out by an ITE.
Capacity Market Operational Plan 2018/19 draft milestones
Prequalification submissions window opens today and will last for eight weeks. The assessments window will last for six weeks from September and the disputes period will last for three weeks from October.
T-1 and T-4 auctions will be held on the 29th January and 5th February respectively.
All the key milestone dates are as follows:
| Prequalification Submissions Window will be 8 weeks | 23rd July to 14th September 2018 |
| Prequalification Assessments will be for 6 weeks | 17th September 2018 to 26th October 2018 |
| Prequalification Results Day 1 – Letters issued | 26th October 2018 |
| Tier 1 Dispute Submissions to Delivery Body | 29th October to 2nd November |
| Tier 1 Dispute Assessments | 5th November to 16th November |
| Prequalification Results Day 2 – Register published | 16th November |
| Tier 2 Dispute Submissions to Ofgem | 19th November to 23rd November |
| T-1 2019/20 Auction – now two days maximum | 29th January 2019 |
| T-4 2022/23 Auction – now two days maximum | 5th February 2019 |
National grid has prepared and published the first guideline for Monitoring of Construction Progress for prospective CMUs and what the obligations are for the capacity providers.
How we can help you?
TEAM’s capacity Market expert has been working for the capacity market as ITE for several companies. Senior Energy Consultant Helder Galrinho is one of the few experienced ITEs in the country and has the required international experience to be authorised to carry out the independent technical reports, such as the 6-monthly reports to substantial completion milestone, financial commitment milestone reports, evidence of project spend & extended years criteria needed for organisations to enter into the capacity market.
Find out more about our Capacity Market Support Service here.