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Issue 726 | BEIS Capacity Market Consultation

Issue 726 | BEIS Capacity Market Consultation

Josephine Lord Josephine Lord Consultant

BEIS Capacity Market consultation Improving the Framework Headline Assessment 1         Assessment & Recommendation BEIS issued a consultation on 24 July proposing a number of changes to the capacity market (CM) Rules in order to improve the functioning of certain areas and better align segments of the Rules with the original policy intent. The changes include amending the generating technology classes and the de-rating methodology related to storage CM Units. This is in response to concerns that the emergence and growth of battery storage in the CM may pose a risk to security of supply if those batteries are unable to generate for the full duration of stress events. BEIS argues that the proposed change seeks to ensure that storage capacity is rewarded appropriately for its contribution to security of supply, and to reduce the risk of insufficient capacity being secured to meet the reliability standard. BEIS said most of the proposals are expected to have a minimal impact on CM costs for the majority of businesses. The proposal to amend the de-rating methodology for storage is expected to affect revenues to some types of battery storage project, although overall it considers the changes are unlikely to significantly affect deployment. It said the government would welcome any evidence from stakeholders as to the actual cost-impacts of the proposed changes to help inform its assessment in making final decisions and any implications for the business models for aggregators. Note in particular that BEIS is clear that ...

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