# The Electricity Capacity (Amendment) Regulations 2025, Note: Explanatory note


(This note is not part of the Regulations)
This instrument amends 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 them rights to receive capacity payments, and which also impose obligations on capacity providers to use their “capacity market units” (“CMUs”) to provide capacity when required to do so. Following a prequalification process during which applications must be made to the scheme’s delivery body (National Energy System Operator), capacity agreements are awarded in auctions. The scheme operates on an annual cycle: prequalification typically takes place in the third quarter of each calendar year; the auctions in the first quarter of the next calendar year; and agreements run for one or more “delivery years”, each of which runs from 1st October to the following 30th September. Further detailed provision is made by the Capacity Market Rules 2014 (“the Rules”). An informal consolidated version of the Rules 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, 3-8 Whitehall Place, London, SW1A 2EG.
Capacity agreements generally have a duration of one, three or 15 delivery years. Eligibility for agreements of more than one year depends on a CMU’s characteristics and whether the amount of money to be spent on it by the capacity provider meets a specified threshold. For the prequalification process that is expected to take place in 2025, ahead of the auctions to take place in the first quarter of 2026, it is proposed to introduce the possibility of nine year agreements for certain CMUs that meet the requirements to be a “declared low carbon CMU” and a new capital expenditure threshold, that would be set at a level between the thresholds for three and 15 year agreements. At the same time, certain declared low carbon CMUs will be permitted to acquire 3 year agreements without incurring capital expenditure up to the usual capital expenditure threshold for an agreement of that duration. Regulation 4 amends regulation 11 of the 2014 Regulations to provide for these changes.
Regulations 3(a) and 5 clarify the existing intention of the provision prohibiting generating stations that have entered into contracts for difference offered under or by virtue of the Energy Act 2013 from being prequalified to bid for capacity agreements. Regulation 7 corrects a detail of timing in the provisions of the 2014 Regulations relating to penalties. Regulation 8 clarifies the operation of the extended performance testing regime, in relation to which changes to the Rules are to come into force at the same time as this instrument. Regulations 3(b), 6, 9 and 10 are similarly consequential on other changes to the Rules that are to come into force at the same time.
The amendments made by this instrument were the subject of consultations in 2023. In order to implement the policies consulted on, amendments to the Rules are also required. Amending Rules will be made so as to come into force either simultaneously with this instrument or on specified dates in 2025.
An impact assessment has not been prepared for this instrument. The scheme was subject to a full impact assessment when it was first introduced. This instrument is intended to improve the operation of existing arrangements for the delivery of the scheme. It introduces changes that will only have minor impacts on business, and no impact is foreseen on the voluntary or public sector.

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Source: https://www.legislation.gov.uk/ukdsi/2025/9780348267303/note (the official version)
Page: https://openlegislation.uk/draft-electricity-capacity-amendment-regulations-2025/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.