Capacity Market

New energy efficiency measures such as energy saving light bulbs have reduced peak demand significantly. As a result, the capacity gap has not occurred as originally forecast. It is now expected to emerge in the mid-2020s when many of our old coal power stations run out and are forced to close. As a result, it is likely that more new-build projects will be needed then, and this will lead to in an increase in prices. 

No stress events have occurred since the Capacity Market began. A stress event happens when there is insufficient capacity to meet demand and keep the lights on. If we had not ensured that we had sufficient capacity, a stress event would have occurred.

Capacity Market agreement prices have been lower than expected – delivering value for money to the consumer.

Delivering security and investment

The Capacity Market continues to ensure that enough electricity is available for the winter as can be seen in the Excess Capacity Gap chart.

The Capacity Market is also intended to encourage the building of new power stations as the older coal and gas stations are retired. The guaranteed income offered by 15 year agreements allows investors to undertake the risk of building expensive new power stations.