On 15 November 2018 the judgment of the General Court of the Court of Justice of the European Union had the effect of annulling the European Commission’s State Aid approval for the GB Capacity Market scheme and introduced a Standstill Period.
On 24 October 2019, the European Commission confirmed that the GB Capacity Market scheme is compatible with EU State Aid rules. The Secretary of State has notified ESC of the Commission’s decision and confirmed the occurrence of the deferred capacity payment trigger event and T-1 capacity agreement trigger event. This means capacity payments can restart under the GB Capacity Market scheme.
In November 2019 suppliers will be invoiced for the Standstill Collection Period Supplier Charge and the first post-Standstill month (December) Credit Cover will also need to be posted.
EMR Settlement has updated on our behalf guidance documents in preparation for this trigger (G22, G11, G17), which are available on the EMRS website.
Payments made by ESC under capacity agreements are funded by the Capacity Market Supplier Charge. The Charge is invoiced monthly based on a supplier’s share of net demand for periods of high demand in the Delivery year multiplied by Total Annual Capacity Provider Payments. Net demand is initially based on forecasted data from suppliers until actual data is available.
From 1 August 2014, the operational costs of ESC are funded by suppliers through the Capacity Market Settlement Costs Levy, which is invoiced monthly based on a supplier’s share of net demand for periods of high demand in the previous financial year multiplied by the total operational costs. The amount of the total operational costs is updated annually by amending The Electricity Capacity (Supplier Payment etc.) Regulations. The operational costs levy for 2019/20 was fixed at £7.554m. For 2020/21 it is fixed at £7.502m.