Cornwall Insight responds to the European Commission approving the British Capacity Market Scheme

Commenting on the European Commission’s announcement Tom Edwards Senior Modeller at Cornwall Insight, said: 

“A commission investigation has found Great Britain’s (GB’s) Capacity Market to be in line with EU State Aid rules, and necessary to guarantee the security of supply. It also did not find any evidence that the scheme puts demand-side response providers at a disadvantage.

“Electricity suppliers in GB are now required to make payments to the Electricity Settlements Company to repay generators which provided capacity during the 2018-19 delivery year. Suppliers were allowed to keep collecting this money under Ofgem’s price cap regulation and payments. The payments are likely to be expected by December 2019 and are estimated to be in the region of £1bn.

“While this undoubtedly good news for generators, this could potentially cause problems for suppliers at a time when they are already facing large payments for other bills such as their Renewables Obligation and Feed-in Tariff.”