This regulation will provide capacity market rules for the ‘standstill period’. No capacity payments will be provided to holders of capacity agreements during the 'standstill period'.
The ongoing 'standstill period' will end on a ‘trigger event’ when it is determined capacity payments can be made in accordance with State aid law. If the ‘trigger event’ is not reached before 1 October 2020, existing capacity market agreements will be terminated immediately without further payments.
The Electricity Capacity (No.1) Regulations 2019 provide temporary rules for the capacity market and the suspension of payments pending state aid approval from the EU General Court of the Court of Justice (EGC).
What is being amended?
The 2019 regulations provide capacity market rules for the ‘standstill period’ – this commenced on 15 November 2018 (the date the EGC revoked state aid approval for the scheme) and will end on a ‘trigger event’ when it is determined capacity payments can be made in accordance with State aid law. If this ‘trigger event’ is not reached before 1 October 2020, existing capacity market agreements will be terminated immediately without further payments.
During the ‘standstill period’ no payments will be made. Deferred payments will be made to capacity market holders if the ‘trigger event’ is reached before 1 October 2020.
During the ‘standstill period’ the settlement body will continue to charge electricity suppliers to finance forthcoming capacity payments.
Capacity market auction
The capacity market auction for the 2019-20 delivery year (commencing 1 October 2019) is anticipated to take place in Summer 2019. Agreements auctioned at this time will be ‘conditional’ and will only provide payments for the period after state aid approval is granted.
The 2019 regulations set rules for this auction.
The capacity market was introduced by the Energy Act 2013. The capacity market provides payments in return for the maintenance of adequate contingency electricity generation capacity.
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