Capacity Market: changes for Prequalification 2027
Applies to England, Scotland and Wales
Consultation description
The Capacity Market (CM) is the UK government’s main tool for ensuring continued security of electricity supply. The CM provides incentives for all forms of capacity, including generation, storage, consumer-led flexibility and interconnection to be on the system to deliver when needed. Agreements secured under CM auctions provide revenue streams which support investment in electricity capacity which in turn ensures security of supply.
Since its inception, the CM has evolved to reflect policy and market changes. Achieving clean power by 2030 will require a renewables-led, decarbonised system supported by a diverse portfolio of flexible technologies to balance supply and demand, with the CM playing a key role in securing this capacity.
To maintain security of supply, it is essential that procured capacity is reliable and deliverable. This consultation outlines proposals to strengthen assurance of delivery, improve CM Rules accessibility, and build on previous changes relating to consumer-led flexibility (CLF).
The consultation includes proposals to address the following:
- delivery assurance framework: strengthening confidence that capacity will deliver when required. This includes enhanced testing and more stringent data requirements
- consumer-led flexibility: CLF is referenced as Demand Side Response (DSR) in CM legislation. Proposals seek to determine a more accurate DSR de-rating methodology and address secondary trading behaviours. A further proposal introduces mitigations against termination events where data flows cannot be established in a timely manner for which the Capacity Provider is not responsible
- further administrative and operational improvements to the Capacity Market: clarifications and amendments to improve transparency, consistency, and enforceability of the Rules
Following this consultation, the government will consider the responses received before deciding which changes, if any, to introduce ahead of Prequalification 2027 for the auctions in 2028, subject to parliamentary time.
The consultation is open to anyone to respond to, but will be of particular interest to:
- energy industry
- consumer groups
- academia
- think tanks
- other organisations who have an interest in security of supply and decarbonisation
Read our consultation privacy notice.
Documents
Ways to respond
Email to:
capacity.market@energysecurity.gov.uk
Write to:
Electricity Security and Market Reform
Capacity Market Delivery Team
Department for Energy Security and Net Zero
3-8 Whitehall Place
London
SW1A 2EG