The European Commission looks set to appeal against the ruling by the European Court of Justice in favour of Tempus Energy that led to the suspension of the UK Capacity Market.
No detail is available, other than the case being lodged.
Tempus has responded.
“While this appeal will not delay the necessary investigation, which is almost guaranteed to fail against what was a damning judgment – the true reason behind this absurd appeal from the European Commission is to reinstate their approval and give investors confidence that the fossil fuel subsidy contracts are safe,” said the company in a blog post.
“To do this they are wasting further resources on this charade – the resources on their part are ironically supplied by European taxpayers money.”
However, Platts quotes an EU source as stating the appeal, while seeking to overturn the verdict, will not delay the in depth investigation the Commission is required to undertake. Tempus’s challenge, and the subsequent ruling by the ECJ, hinged on the Commission failing to effectively scrutinise the CM’s compatibility with State Aid rules via a formal investigation.
“The Commission didn’t do a very good job,” said Tempus CEO, Sarah Bell, at the time.“I can explain why the Capacity Market is anticompetitive to a five-year-old,” she suggested, in reference to one-year CM agreements available to demand-side response, versus up to 15-year agreements for new build generation.
The UK government says it is working with the Commission to reinstate the Capacity Market as soon as possible. In the meantime, it and industry are working to keep collecting Capacity Market payments via bills while the CM is suspended, as collecting payments is not a State Aid issue. If the CM is reinstated, payments will then be distributed to capacity providers.
Government hopes to run a summer top up auction for next winter.