Capacity Market suspended: BEIS issues response after European Court ruling
Today (15.11.18) the General Court of the Court of Justice of the European Union found in favour of Tempus Energy, against the European Commission, annulling the Commission’s State aid approval for the UK Capacity Market.
Part of the government’s Electricity Market Reform (EMR) package, the Capacity Market ensures the security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when needed.
The judgment suspends the state aid approval for, and therefore the legality of granting aid through, the capacity market.
The capacity market will enter a ‘standstill period’ which prevents the UK Government from holding any capacity auctions, making any capacity payments under existing agreements, or undertaking any other action which could be seen as granting state aid, until the scheme can be approved again.
BEIS says it is “…already working closely with the Commission to aid their investigation and seek timely State aid approval for the Capacity Market. The ruling does not change the UK Government’s commitment to delivering secure electricity supplies at least cost, or our belief that Capacity Market auctions are the most appropriate way to do this. The ruling will not impact security of supply this winter.”
This ruling imposes a ‘standstill period’ on the Capacity Market. BEIS is working with National Grid to contact all affected parties.
Keep checking back for updates – the SECR Hub team will be be monitoring this story as it progresses.