Capacity Market Standstill arrangements
Invoices for Capacity Market Supplier Charges have been suspended since 15 November 2018 following the ECJ’s ruling (see Announcements). On 28 February 2019, BEIS responded to its consultation on Proposals for technical amendments to the capacity market confirming that it “will proceed with making the necessary legislative changes to enable suppliers to make payments to the Settlement Body [the Electricity Settlements Company] during the standstill period toward their post-standstill supplier charge liability to fund deferred payments to capacity providers who have met their obligations during the standstill period". For more information see the BEIS consultation response.
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 2014/15 was fixed at £1.374m. For 2015/16 it is fixed at £3.891m.