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News post

UK Capacity Market returns to normal operation

Regular monthly payments recommenced from 1st December 2019, with the backdated payments for October 2018 to November 2019 paid to Capacity Providers on 20 January 2020.

Auctions will be run as usual to ensure security of electricity supply. These begin on 30 January 2020 with three auctions to ensure there is sufficient electricity capacity to meet the times of highest electricity demand.

The three auctions will procure capacity for one, three and four years’ time. It is welcome that the Capacity Market has returned and will provide a stable revenue stream for all distributed energy assets.

Separately, the UK Government is required to a new European Regulation with regards to the Capacity Market. The UK must demonstrate to the European Commission why it requires a Capacity Market to ensure security of electricity supply.

As a result, the UK Government is required to make a tweak to the way it runs its auctions. This tweak is a technical change and will not affect any aspect of the auctions and will not affect payments. Centrica is working closely with the UK Government to ensure the correct implementation, but we do not foresee any issues.

Throughout the first half of 2020, the UK Government will make changes to the Capacity Market, which will include reducing the minimum threshold to 1 MW. This will provide better opportunities for smaller capacities to participate in the mechanism

Centrica will continue to be fully engaged with the Government and the regulator, Ofgem to ensure that the customer assets can fully access the Capacity Market; Centrica can help your organisation take advantage of the resumption of the Capacity Market with our Energy Optimisation solutions. Learn more below.

Demand Side Response (DSR) can help your organisation improve energy efficiency and generate revenue.