The UK government has reiterated that it hopes to re-start the Capacity Market as soon as possible and intends to run a ‘top up’ auction next summer.
The market was suspended last month following a legal challenge by Tempus Energy.
The European Commission now has to undertake a formal investigation after the General Court of the European Union ruled it did not effectively scrutinise the UK’s plans the first time around.
If the investigation, which Beis said the Commission hopes to start early next year, puts the CM in the clear, it would mean that auction results to date still stand and payments are legal, according to the department.
The the meantime, it has asked National Grid to keep running the Capacity Market scheme “short of making payments”. If those with contracts deliver their obligations, they may then be eligible for deferred payments if the market is reinstated, Beis said.
The department added that it is exploring additional actions around continuity in supplier charging arrangements.
The T-1 top up auction will be held in summer for delivery the following winter.
Beis said it would shortly consult on regulatory changes needed to allow that auction to take place.
If it goes ahead, any agreements awarded “will be conditional on the outcome of the Commission’s formal investigation”.
The department stated that it would ensure “any mechanism to ensure security of supply in the UK is technology neutral and in line with the Guidelines on State aid for environmental protection and energy 2014-2020”.
See the update here.