Minister for Energy (): I am tabling this
statement to inform members of the publication of a consultation
response relating to the Capacity Market (CM) titled ‘Government
Response to consultation on proposal regarding locational changes
of Capacity Market Units'. It sets out the government's intention
to amend the rules that allows for notification of a change of
address in the CM to prevent New Build Capacity Market Units
(CMUs) and DSR CMUs from changing address between
prequalification and delivery. This change will apply to all
future CM agreements starting from Prequalification 2026.
The government recognises that the ability to change components
is necessary for DSR CMUs. It is worth noting that only 5 change
of address requests have been made by DSR units under the Rule
being changed through this consultation and the Rules will still
have options for DSR CMUs to change component addresses after
these changes have been made. Unproven DSR can notify component
addresses ahead of the Delivery Year through Rule 8.3.3A and
Proven DSR can reallocate components within the Delivery Year
under rule 8.3.4.
Since its introduction in 2014, the CM has secured reliable
capacity for when there is greater demand for electricity in
Great Britain. This capacity is acquired through competitive
annual auctions held four years and one year ahead of their
respective delivery years. The government regularly amends the
framework underpinning the Capacity Market before auction cycles
to ensure it is fit for purpose, cost-effective and meets broader
strategic objectives such as clean power by 2030.
The government intends to introduce these changes for the 2027
auctions coming into force for Prequalification in summer of
2026. This will give participants clarity and certainty ahead of
their entrance into Prequalification and allow them to adapt to
the changes the government has made.
