National Grid ESO issues FAQs on Capacity Market judgment 

National Grid ESO has prepared a useful set of FAQs for capacity agreement holders and capacity market applicants in light of this week’s announcement.

It says it will continue to provide further updates as the situation becomes clearer.

What happens next?

  • National Grid is still able to continue with activities which do not involve granting state aid, including completing the pre-qualification process for 2019 in case it is required for future capacity market auctions.
  • BEIS is doing everything it can to re-obtain state aid approval from the European Commission as soon as possible. The Commission will now need to undertake a formal investigation before providing state aid approval for the capacity market.
  • BEIS will support the Commission’s investigation where required. As part of this process BEIS will carefully consider whether any changes to the design of the capacity market are required.
  • National Grid says it can’t speculate on how long it will take the Commission to conclude their formal investigation into this case. However, BEIS will work closely with them to ensure the process runs smoothly and that state aid for the capacity market can be approved as soon as possible.

Will the next round of Capacity Market auctions go ahead?

  • The Secretary of State has today (15.11.18) instructed National Grid to postpone indefinitely the upcoming T-4 and T-1 Auctions for Delivery Years 2022/23 and 2019/20 respectively, in accordance with Regulation 26(3)(a) of the Electricity Capacity Regulations 2014.
  • The Government is intending to seek separate state aid approval from the Commission to run a one-off ‘replacement’ T-1 Auction. The postponed T-4 is intended to be run as a T-3 Auction in next year’s auction round, subject to the Commission completing its formal investigation and providing state aid approval for the main capacity market scheme.

To read the full suite of FAQ’s click here.