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The Capacity Market is at the heart of the government’s plans for a secure and reliable electricity system. It ensures sufficient investment in the overall level of reliable capacity (both supply and demand sides) needed to provide secure electricity supplies.
The legislation that implements the Capacity Market contains a requirement for the government to carry out a 5-yearly review of the scheme and publish a report summarising the review. This review has assessed, in summary, the appropriateness of the objectives of the Capacity Market and its implementing legislation, the extent to which those objectives have been achieved and whether those objectives remain appropriate and if so, whether they can be achieved in a less burdensome way.
The review has been informed by a call for evidence held in August 2018. A summary of responses to the call for evidence was published in March 2019.
Overall, our review has found that the scheme has been working well and performance against objectives has been good. We therefore do not intend to make any major changes to the Capacity Market at this stage. But we intend to continue to make incremental changes to the Capacity Market based on the evidence of its operation and the outcome of our call for evidence. We expect to undertake consultation and make legislative changes to address issues highlighted by the call for evidence following the publication of the report. A plan for this has been set out in the report.