Technical update to the White Paper on Electricity Market Reform
The Government published on 15 December the Technical Update to its White Paper on Electricity Market Reform (‘Planning our electric future: a White Paper for secure, affordable and low-carbon electricity’).
The Technical Update sets out:
- the Government’s decision to legislate for a capacity mechanism in the form of a Capacity Market, designed to ensure consumers continue to enjoy reliable electricity supplies and avoid the higher prices that could result from tight capacity margins;
- the Government’s view that the System Operator, part of the National Grid, best meets the criteria for delivering the Feed-in Tariff with Contracts for Difference (FiT CfD) and the capacity mechanism;
- detail on work to enable investment decisions for early projects;
- the next steps for the Electricity Market Reform programme; and
- more detail on arrangements for Renewable Obligation Certificates from 2027 onwards.
- Frequently asked questions have been produced to accompany the Technical Update.
The Impact Assessment sets out the rationale for the introduction of a capacity mechanism and an appraisal of the different policy options that were considered:
The Technical Update forms the Government response to the consultation on possible models for a capacity mechanism. A high level summary of responses is set out in Chapter 3 and Annex A provides a list of respondents. Individual responses are available on the Consultation on possible models for a Capacity Mechanism page.