Capacity Market: an EMR Primer
30 November 2015
This primer briefing is the second in a series of briefings describing the principal mechanisms introduced as part of the UK Government's Electricity Market Reforms (EMR), namely:
- Contracts for Difference;
- Capacity Market Mechanism;
- Carbon Price Floor; and
- Emissions Performance Standard.
The EMR reforms have three key aims: to bolster the security of electricity supplies, encourage the decarbonisation of the power sector and keep energy affordable. This primer explains how the Capacity Market works and covers:
- Eligibility for the mechanism;
- The Pre-qualification and auction processes;
- The form and content of Capacity Agreements including key milestones and termination provisions;
- The delivery of capacity obligations, payments, penalties and trading; and
- Implementation of the Capacity Market to-date.