Positive news for capacity market

21 May 2020

The REA reports that the Government has taken a step towards the emergence of a robust energy storage industry in the UK, and towards a power system which is more ‘flexible’ and able to integrate greater volumes of renewable electricity, as they confirm long-awaited changes to the Capacity Market.

A press release from the REA states:

The Capacity Market is an auction system designed to ensure sufficient electricity generation capacity is available at peak times. It has been criticised in the past for not considering the carbon intensity of the technologies it contracts, and for not supporting new and emerging technologies like demand response by its design.

Commenting on the changes, Dr Nina Skorupska CBE, Chief Executive of the REA said:

“A common barrier to advancing the UK’s energy storage sector is that our electricity grids and major energy policies from Government are set up for an age of large-scale, centralised fossil power stations. As clean energy technologies plunge in cost, and the climate crisis becomes ever-more urgent, it is crucial that the Capacity Market is designed in line with our decabonisation goals.

“The changes to the Capacity Market today will help make it easier for cutting-edge clean technologies to compete.

“In particular, we welcome the introduction of emission limits with mandatory reporting and verification. This should help push out some of the highest carbon-emitting plants and redirect funding to cleaner means of ensuring the security of supply. Reducing prequalification rules will also be helpful, as will allowing demand-response projects to bid for longer contract lengths. The reduced capacity thresholds will additionally ensure a greater number of smaller sites can participate.”

Vijay Shinde, Chair of the REA’s Energy Storage and Large Scale Power Forums and CTO of Harmony Energy commented:

“The outcome is encouraging to the energy storage industry, the changes will help progress a number of projects which in turn will assist in unlocking the vast potential of renewable power in the UK.

“Today’s positive announcement comes on the heels of the UK regulator last week approving changes ending ‘double charging’ of electricity storage. The current grid charging arrangements, which are distortive and leading to network costs being disproportionately recovered from electricity storage facilities, will thankfully end March 2021.

“With these regulatory changes happening, the UK storage industry is heading in the right direction.”


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