On Monday 5 December, the European Commission gave the go-ahead to new auctions for electricity capacity.
The auction will bridge the gap that could have occurred in 2017 before the Great Britain Capacity Market becomes operational. The Great Britain Capacity Market, consisting of a capacity auction to reward contracted capacity providers, was approved by the Commission in July 2014. To address this, the UK plans to hold a supplementary capacity auction in January 2017.
Since 2014, the market conditions in Great Britain have changed considerably and, in particular, wholesale prices decreased significantly. An unexpectedly higher number of capacity providers therefore risk closing, meaning that the UK might no longer have sufficiently reliable capacity.
To address this, the UK plans to hold a supplementary capacity auction in January 2017, under the same conditions as in 2014. In practice, this means that the Great Britain Capacity Market will de facto become operational one year earlier than initially proposed, to ensure that sufficient electricity capacity is available by providing power plants and demand response operators with remuneration on top of the income obtained from selling electricity on the market.
The UK has taken specific measures to ensure that the supplementary capacity auction will be competitive, for instance by attracting as many demand response operators as possible. The Commission is therefore satisfied that the risk of overcompensating participating capacity providers has been reduced to a minimum. (Original version in French by Élodie Lamer)