What’s new on the Capacity Market?

The next milestone for the capacity market is the capacity auction on the 30th January. This is for the T1 delivery (2018-2019) and the T4 capacity auction for 2021-2022 delivery will take place on 6th February.

Those who have passed the prequalification stage must deliver a Financial Commitment Milestone report within 18 months of the Capacity Market Auction results. From the date of the Capacity Auction results until the Substantial Completion Milestone the capacity provider must deliver progress reports, which include an Independent Technical Assessment, no less frequently than every six-months. Those reports must be completed for each generating unit comprising a Capacity Market Unit (CMU) and be carried out by an Independent Technical Expert (ITE).

The Capacity Market was established as part of the UK Government’s Electricity Market Reform (EMR) Programme. Its goal is to ensure the future security of our electricity supply at the lowest cost to consumers by offering incentives.

What are the changes?

While to date there has been one single de-rating factor for all storage based on the historical technical availability of pumped hydro at times of peak demand (96.11%), from now-on there is a range of de-rating factors for storage sub-class durations ranging from 30 minutes up to 4 hours. In a growing market it is important to find a way to deal with a stress event, so it is necessary to apply de-rating to batteries as a function of their storage duration. This sort of classification will make the market rethink battery storage systems.

Pre-qualified new battery storage is around 6.0 GW for the T-4 (2021-2022) and 1.4 GW for the T-1 (2018-2019). Some storage developers may be disappointed that the de-rating factors were published after the prequalification results.

Capacity Market Deratings

How we can help you:

TEAM’s Capacity Market expert has been working as Independent Technical Expert, for a number of companies. Senior energy consultant Helder Galrinho, is one of the few experienced ITEs in the country with 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.

Capacity Market Support

Posted by TEAM on 25th January 2018