Out-Law News 1 min. read
11 Jul 2017, 10:59 am
The targets (4-page / 142KB PDF) follow the publication of National Grid's Electricity Capacity report in June and recommendations from BEIS' panel of technical experts (56-page / 1MB PDF).
Both auctions are designed to procure capacity for the winter, when energy demand rises.
The parameter for the 2018/19 'T-1' auction is in line with that recommended by the technical expert panel, which was 0.5GW lower than proposed by National Grid. For the 2021/22 'T-4' auction, National Grid recommended the procurement of 50.5GW. The panel said the volume needed to be no more than 50GW.
The technical experts said they took a less conservative view than National Grid in two main areas: non-delivery of existing capacity market contracts, and response of demand to peak prices. The panel accepted National Grid's judgement of the risks of non-delivery from sources such as coal, battery storage, embedded generation and demand-side response. However, it said the loss of one source of energy would increase the incentives for others to fulfil their capacity contracts.
In addition, energy regulator Ofgem recently confirmed the introduction of 21 rule changes (53-page / 650KB PDF) to the Capacity Market Rules 2014 (CMR), such as an alteration in the requirements to demonstrate satisfactory performance days.
Ofgem will lay the CMR changes before the UK parliament ahead of the 2017 prequalification, which is due to start in autumn 2017. It plans to implement 20 of the changes in 2017 and one in 2019.
The news follows National Grid's recent Systems Needs and Product Strategy (SNaPS) consultation into the balancing of energy needs, which energy law expert Nicholas Shenken of Pinsent Masons, the law firm behind Out-Law.com, said would encourage innovation and the further development of the battery storage sector.