Capacity Market

  • Energy Market Design

    How does REMA impact energy generation, flexibility and consumers?

    The Review of Electricity Market Arrangements (REMA) is the largest review programme of GB electricity market arrangements for a generation. It comes at a time when European energy markets are suffering extreme turmoil. Depending on the outcome there could be significant implications for generators, flexibility providers, and, indirectly, consumers. REMA...

  • Energy Market Design

    REMA: electricity market design choices

    Electricity markets will serve as the foundation for the future GB energy system.  This article examines some of the market design decisions that will be considered by the Review of Electricity Market Arrangements (REMA). Market design goals At its most simple, a well-functioning market will attract enough potential “buyers” and...

  • Commercial and market outlook

    Capacity, reform, and unlawful strategies: 5 things that happened yesterday

    Capacity, reform, and unlawful strategies: yesterday was a busy day for energy geekery. The developments encapsulate the shorter and longer term challenges and uncertainties present in the energy market presently: Read the full article here

  • Business supply and services

    Re-balancing the balancing costs –BSUoS charges to be levied solely on suppliers from April 2023

    Balancing the electricity system costs money. National Grid in its role as Electricity System Operator (ESO) takes actions in every half hour to achieve the remarkable feat of keeping supply and demand finely balanced on our national electricity system – maintaining a system which runs between 49.8 and 50.2Hz with...

  • Low carbon generation

    Reform in haste, repent at leisure: squaring electricity market reform with investor confidence

    The review of electricity market arrangements (REMA) signalled by the energy security strategy could impact wholesale & balancing markets, & there could be a need to examine the capacity market rules & CFD contracts. It is too early to know what options will ultimately be adopted or when changes would...

  • Commercial and market outlook

    Perspective | Is the design of the electricity market costing consumers money?

    This article is from our Energy Spectrum publication which was published on 4 March 2022. It has become increasingly clear the existing market design is unfit for either a future net zero world or a period of fossil fuel price crisis, but what market design might be best for our...

  • Low carbon generation

    Surprising decision by the Secretary of State for BEIS regarding the Capacity Market auction

    An interesting and surprising decision by the Secretary of State for BEIS regarding the Capacity Market auction parameters for the upcoming T-1 auction being held on 15 February. The procurement target has been lifted from 4.5GW (as set in the draft parameters in July 21) to 5.361GW. This is notably...

  • Low carbon generation

    Here we go again: Capacity Market auctions, what can we expect?

    After recently issuing our latest Capacity Market Forecast, we wanted to highlight some of the key trends to look out for regarding the upcoming Capacity Market (CM) auctions being held in February 2022. This round of CM auctions begins with the T-1 for Delivery Year 2022-23 on 15 February followed...

  • Energy storage and flexibility

    Batteries, the Capacity Market and the challenge of Extended Performance – Part 2

    In a previous blog published on Monday 25 October, we discussed the issue of Extended Performance Tests within the GB Capacity Market (CM). In summary, due to degradation overtime it is currently not possible for batteries to be paid for their full capacity in the CM without risking significant fines....

  • Energy storage and flexibility

    Batteries, the Capacity Market and the challenge of Extended Performance – Part 1

    Optimising site configuration and trading strategy for battery assets is a challenge, developers need to consider access to different markets, trading capabilities and risk appetite. These are in addition to physical and location considerations such as technical limitations and network charging. However, one thing that has always been taken as...

  • Regulation and policy

    Electricity transmission charging reform – overtaken by changing priorities?

    Charging for the transmission network is never out of the development process for long. From major reviews, such as that initiated under Project Transmit in 2010, to significant reforms such as removing the triad benefit from distributed generation in 2018, and a host of smaller developments, change seems the only...

  • Announcement

    The top 5 podcasts of 2020

    We released 13 podcasts in 2020 covering all aspects of the energy market, from the Capacity Market and Electric Vehicles to Faster Switching and heat networks. Here are our top five podcasts of the year, ranked by the number of people who listened. 5. The Impact of COVID-19 on System...

  • Home supply and services

    COVID-19-driven changes to electricity Third Party Charges

    The impact of COVID-19 on the energy sector has been a hot topic for the last few months. As we progress further into the UK’s lockdown period we are now beginning to piece together the wider picture of effects across energy Third Party Charges (TPCs). These impacts are expected to...

  • Low carbon generation

    Flexible Asset PPAs – more capacity, more competition

    The Power Purchase Agreement (PPA) market for flexible assets in the last six months has both grown in size and seen increased levels of competition as new offtakers and optimisers make themselves known in the market. What do we mean by the PPA market for flexible assets? We mean the...

  • Net zero corporates and ESG

    Editor’s Pick Ireland | Clean Energy Package: what does it really mean?

    The Capacity Market Code removes or restricts payments to fossil fuel generators and allows cross border participation in Capacity markets, arising from the Clean Energy Package (CEP). We look at some of the other potential changes in the way EirGrid and SONI operate our energy system arising from the implementation of the...

  • Low carbon generation

    Editor’s Pick | The green shoots of the Capacity Market auctions

    A pivotal year for the Capacity Market (CM) draws to a close, with the first long-term auctions for capacity since 2018. But for once the CM is the least interesting thing happening in the market, and the scheme itself seems out of step with the net zero future. In this Energy...

  • Energy storage and flexibility

    Storage story: a regulatory run-down

    While electricity storage has long been recognised as a crucial solution to mitigating the drawbacks of some types of renewable generation, it has taken some time for the regulatory and charging framework to catch up. It has taken years, but recent progress on the licensing and exemptions from some final...

  • Energy storage and flexibility

    I can change – what’s wrong with the Capacity Market (and what we need to do to fix it)

    The return of the Capacity Market (CM) after its legal hiatus in November 2019 was a relief to many owners and developers of generating capacity in GB. But I think it’s time to ask whether it’s really the best tool to reach net zero at lowest costs to consumers. The...

  • Commercial and market outlook

    Editor’s Pick | Lower procurement targets recommended for 2020 CM

    National Grid Electricity System Operator (ESO) has issued its updated recommended procurement targets for the upcoming Capacity Market auctions. For all three auctions, the recommended capacity level was lower than the target previously confirmed by the Secretary of State (SoS). A series of reports, published on 9 January, set out...

  • Low carbon generation

    Guess who’s back? The Capacity Market and what happens next

    On 24 October, the European Commission (EC) announced its decision to approve the GB Capacity Market (CM) after an investigation which lasted several months. While this is a positive outcome for holders of capacity agreements, the ~£1bn ‘back-payment’ bill comes at a difficult time for suppliers, who are facing up...

  • Energy storage and flexibility

    Five things we learned in our new Flexible PPA Market Report

    Cornwall Insight has been examining the fast-developing market for flexible asset Power Purchase Agreements (PPAs) with a new report, The Flexible PPA Market Report, specifically launched to cover this. Through our leading market research and regulatory expertise, complemented by in-depth discussions with a range of market participants, the report encapsulates...

  • Low carbon generation

    Black-out, what blackout? The curious case of unexciting imbalance prices on 9 August

    As a self-confessed imbalance pricing geek, one of my first questions as I stood stranded in St Pancras station on Friday evening 9 August, was: what was the imbalance price? And was it £6,000/MWh? Spoiler: it wasn’t, and it shouldn’t have been – but we might see imbalance prices of...

  • Commercial and market outlook

    Unplugged: net zero highs, but capacity market lows

    Cornwall Insight’s founder and non-executive director Nigel Cornwall is now writing a monthly review of the latest energy market developments in our weekly Energy Spectrum publication. Here is the first one.The landmark legislation of 24 June committing the government to a net zero greenhouse gas emissions target for 2050 has...

  • Commercial and market outlook

    Five things we learnt from this week’s Energy Spectrum | 671

    On 12 June the EMR Delivery Body announced that the T-1 Capacity Market auction for delivery year 2019-20 cleared at £0.77/kW – the lowest clearing price ever to be achieved in a GB capacity auction. In this week’s Energy Perspective, we pick apart the reasons behind the clearing price falling so low....

  • Commercial and market outlook

    Five things we learnt from this week’s Energy Spectrum | 670

    The government’s decision last week to legislate for a net zero carbon emissions target by 2050 is an epoch defining development for the energy sector. However, as we discuss in this week’s Energy Perspective, there is now greater expectation on the content of the upcoming White Paper to see if policy measures...

  • Commercial and market outlook

    Five things we learnt from this week’s Energy Spectrum | 669

    In this week’s Energy Perspective, we put Ofgem’s strategic review of the microbusiness retail market under the microscope, reiterating one point very clearly: the microbusiness market is different to the domestic market. And while the review is aimed squarely at ensuring access to a competitive and secure market for businesses, it...

  • Commercial and market outlook

    Five things we learnt from Energy Spectrum | 661

    In this week’s Energy Perspective, we consider investor confidence and market sentiment following the legal challenge to the Capacity Market, the specific steps BEIS has taken to settle nerves and also the general support being afforded to demand-side response to provide market access. The proposals from government in its Smart Export Guarantee (SEG) consultation...

  • Commercial and market outlook

    Five things we learnt from Energy Spectrum | 659

    In this week’s Energy Perspective, we set out the main developments in the GB Capacity Market since the November 2018 ruling by the European Court of Justice that led to its suspension including, most recently, the European Commission’s confirmation it is to undertake a full investigation into the scheme. The business case...

  • Commercial and market outlook

    Clarity on Capacity Market renewable ratings, but gap in government policy remains

    On 7 January, National Grid ESO published its consultation on the new de-rating factor methodology to be used for renewables participating in the Capacity Market (CM). The document forms a key part of the five-year review of the CM, for which a government call for evidence was published in August 2018.   In previous...

  • Commercial and market outlook

    Five things we learnt from this week’s Energy Spectrum | Issue 649

    There is scant evidence that dividend payments are crowding out long-term investment in either the regulated or competitive utilities market, while regulators have been lax in policing capital structures of the regulated network companies. In our Energy Perspective piece this week Cornwall Insight Associate Peter Atherton rebuts the argument that...