Electricity Market Reform: Capacity Market

Capacity Market will ensure security of electricity supply by providing a payment for reliable sources of capacity.

Part of the government’s Electricity Market Reform package, the Capacity Market will ensure security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when needed. This will encourage the investment we need to replace older power stations and provide backup for more intermittent and inflexible low carbon generation sources.

The Capacity Market has also been designed to support the development of more active demand management in the electricity market.

This page contains all the general information on the Capacity Market including the Capacity Market Regulations and Rules. Specific information on the auctions can be found at:

Transitional arrangements auction

2016 Capacity Market Auction

2015 Capacity Market Auction

2014 Capacity Market Auction

Capacity Market stakeholder events

Capacity Market Rules

The rules provide the detail for implementing the operating framework set out in regulations. This means that the rules focus on the technical and administrative rules and procedures for how the Capacity Market operates and includes matters such as procedures relating to the day-to-day running of the Capacity Market, the process by which capacity providers pre-qualify, and rules for running capacity auctions and issuing capacity agreements to successful bidders.

  1. Capacity Market Rules
  2. Draft Capacity Market Rules 2014

Implementing Electricity Market Reform (Chapter 3)

Implementing Electricity Market Reform provides stakeholders with a comprehensive overview of EMR policy. The document includes chapters on the two main mechanisms that the government is introducing to reform the electricity market: Contracts for Difference (CFDs) and the Capacity Market, as well as detail on measures to encourage greater energy efficiency through the Electricity Demand Reduction (EDR) programme.

Impact Assessment on the Capacity Market (June 2014)

The June 2014 impact assessment provides the rationale for why the government is intervening in the market and the costs and benefits of the intervention.

  1. Proposals for implementation of Electricity Market Reform

Final Capacity Market Design presentation

A brief outline of the reasons a Capacity Market was introduced, and summary of the final design for the Capacity Market.

  1. Final Capacity Market Design presentation

Consultation and Amendments to Capacity Market Rules 2014

Consultation on proposed amendments to the Capacity Market Rules 2014 and explanation of some immediate amendments to the Capacity Market Rules 2014.

  1. Consultation and Amendments to Capacity Market Rules 2014

Reports and research

  1. Future potential for Demand Side Response in Great Britain
  2. Price duration equivalence report

Setting Capacity Market parameters

  1. Setting Capacity Market parameters
Published 24 July 2014
Last updated 15 February 2016 + show all updates
  1. DECC, Ofgem, National Grid, ESC Event Capacity Market Stakeholder Workshop discussion summary
  2. Letter from Amber Rudd about the Electricity Market Reform capacity market auction 2015.
  3. Capacity Market - location of provisional results
  4. Update to the target capacity for the Capacity Market auction
  5. First published.