Explanatory note

These Regulations make amendments to the Electricity Capacity Regulations 2014 (S.I. 2014/2043) (“the 2014 Regulations”).

The 2014 Regulations make provision for the purpose of meeting consumers’ demand for electricity in Great Britain by establishing a Capacity Market (“the scheme”) under which those who make capacity available (“capacity providers”) can obtain capacity agreements which give capacity providers rights to receive capacity payments, and which also impose obligations on capacity providers to provide capacity during one or more specified years. Following a prequalification process during which applications must be made to the scheme’s delivery body (National Grid ESO), capacity agreements are awarded in a competitive process (“capacity auctions”) held four years ahead of a delivery year (“T-4 auction”) and one year ahead of a delivery year (“T-1 Auction”). Further detailed and technical provision is made by the Capacity Market Rules 2014 (“the Rules”). A consolidated version of the Capacity Market Rules 2014 can be found at https://www.gov.uk/government/publications/capacity-market-rules. Copies are available from the Department for Energy Security and Net Zero, 1 Victoria Street, London, SW1H 0ET.

Regulation 3 amends regulation 10 of the 2014 Regulations so that the Secretary of State is only required to publish a decision about whether to hold a T-1 Auction and a T-4 Auction if they decide not to hold one or both of those capacity auctions. It also removes references to past capacity auctions.

Regulation 4 amends regulation 34 of the 2014 Regulations to allow certain capacity providers to request that their capacity agreements be terminated when they intend to apply to participate in the Contracts for Difference scheme. More information about this scheme can be found at https://www.gov.uk/government/publications/contracts-for-difference/contract-for-difference.

Regulation 5 amends regulation 41(2) of the 2014 Regulations so that the scheme’s settlement body (the Electricity Settlements Company) has more time to determine penalty charges owing by certain capacity providers and to issue invoices for such penalty charges to those capacity providers.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary, or public sector is foreseen.