{
  "url": "https://openlegislation.uk/draft-electricity-capacity-amendment-regulations-2016/note",
  "json_url": "https://openlegislation.uk/draft-electricity-capacity-amendment-regulations-2016/note.json",
  "legislation": "ukdsi/2016/9780111146774",
  "legislation_title": "The Electricity Capacity (Amendment) Regulations 2016",
  "legislation_url": "https://openlegislation.uk/draft-electricity-capacity-amendment-regulations-2016",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Regulations)\nThese Regulations are made under Part 2, Chapter 3 of the Energy Act 2013 (c. 32) (“the Act”). They amend in various respects the Electricity Capacity Regulations 2014 (S.I. 2014/2043) (“the Principal Regulations”), which have previously been amended by Schedule 2 to the Electricity Capacity (Supplier Payment etc.) Regulations 2014 (S.I. 2014/3354) (“the Supplier Payment Regulations”), by the Electricity Capacity (Amendment) Regulations 2015 (S.I. 2015/875), and by the Electricity Capacity (Amendment) (No. 2) Regulations 2015 (S.I. 2015/1974). They also contain amendments to the Supplier Payment Regulations.\nThe Principal Regulations make provision for the purpose of enabling consumers’ demands for electricity in Great Britain to be met, by establishing a system (“the Capacity Market”) whereby those who offer to make electricity capacity available can (as the result of an auction) be awarded capacity agreements, which confer rights and impose obligations on those awarded the agreement. Those rights and obligations consist principally of the right to receive “capacity payments” from a settlement body established for that purpose, these being payments for generating (or reducing demand for) electricity at times of system stress; and the liability to make a penalty payment where the capacity agreement is breached. There are three kinds of capacity market units (“CMUs”) that can be used to participate in the Capacity Market: generating CMUs, demand side response (“DSR”) CMUs, and interconnector CMUs. The Principal Regulations and the Supplier Payment Regulations also impose obligations on persons who supply electricity in Great Britain pursuant to an electricity supply licence under section 6 of the Electricity Act 1989 (c. 29). Those obligations consist principally of requirements to make payments to the settlement body. Further detailed and technical provision is made by the Capacity Market Rules 2014 (“the Rules”).\nThe amendments are set out in the Schedules to these Regulations.\nPart 1 of Schedule 1 makes provision for an additional Capacity Market auction to those provided for in the Principal Regulations (a supplementary auction) to take place between September 2016 and July 2017 for the delivery of capacity in the 2017/18 Capacity Market delivery year; and makes associated amendments required to facilitate that auction.\nPart 2 of Schedule 1 amends provisions relating to the termination of capacity agreements and to the credit cover required to be provided by applicants for capacity agreements in certain circumstances. In particular, provision is made for a wider range of termination fees (liability for which is determined by termination events provided for in the Rules); for increases in the level of credit cover; and for further increased credit cover to be provided in certain circumstances in the case of large new build CMUs.\nPart 3 of Schedule 1 contains amendments relating to the transfer of capacity market obligations from one CMU to another (including the transfer of a part only of the relevant capacity market agreement); and amendments extending the range of circumstances in which payment can be made for over-delivery on a capacity market obligation.\nPart 4 of Schedule 1 modifies regulation 29 of the Principal Regulations, which makes provision for DSR transitional auctions, and makes associated provision. The modification narrows the class of CMUs eligible to take part in the second of those auctions.\nPart 5 of Schedule 1 amends provisions in the Principal Regulations relating to the role of the Secretary of State and the Gas and Electricity Markets Authority in reviewing the Principal Regulations, the Supplier Payment Regulations and the Rules from time to time, in particular so that provision for the review of the Rules can be made in the Rules themselves.\nPart 6 of Schedule 1 contains miscellaneous and minor amendments to the Principal Regulations, including in relation to the process by which parameters for Capacity Market auctions are set, and Schedule 2 contains miscellaneous and minor amendments to the Supplier Payment Regulations, principally in relation to the time at which various obligations under those Regulations must be discharged.\nA full impact assessment is available from the Department of Energy and Climate Change at 3 Whitehall Place, London, SW1A 2AW and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukdsi/2016/9780111146774/note",
    "retrieved_at": "2026-10-30T15:08:16.189920+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}