DECC confirms capacity market reforms

The Department for Energy and Climate Change intends to take action to ensure the UK has long-term energy security. Its focus will be on building a system of energy infrastructure suitable for the current times.

After the consultation earlier this year, a package of reforms to the Capacity Market have been confirmed. The Market is the UK’s main tool to ensure security of supply. It pushes down the costs so achieve the lowest price possible for the bill-payer.

Three key reforms implemented include:

1. Buying more electricity and buying it earlier.

2. Introducing stricter sanctions for firms who renege on their Capacity Market agreement.

3. Bringing the Capacity Market forward by one year to commence instead in 2017/2018.

The changes are intended to safeguard energy supply to protect both families and businesses from hikes in energy costs.