The European Commission has cleared the GB Capacity Market, in suspension since last year, saying it passes State Aid tests.
The Commission had been required to re-examine whether the CM complied with State Aid rules after a Tempus Energy challenge over whether it disadvantaged demand side response (DSR) providers was upheld. But the Commisison said it “did not find any evidence that the scheme would put demand response operators or any other capacity providers at a disadvantage with respect to their participation in the scheme”.
The Commission noted that during the recent five-year review of the capacity market, the UK committed make improvements in:
- The minimum capacity threshold for participating;
- Direct participation of foreign capacity;
- Participation rules for new types of capacity;
- Access to long-term contracts;
- Volumes in the year-ahead auction;
- Compliance with new Electricity Regulations.
The spotlight will fall now on companies who have to make CM payments for the period while the market was suspended. BEIS decided not to make it compulsory for suppliers to make payments into a ring-fenced account but they will face bills for the period within the month.
Further reading
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