Guidance and Publications

LCCC and ESC covering letter response to the BEIS Capacity Market and Emissions Performance Standard Review 2018

Posted 23.04.2018

LCCC and ESC covering letter response to the Department for Energy Security's (DESNZ, formerly BEIS) Capacity Market and Emissions Performance Standard Review 2018.

Here's what to expect:

1. Operational Roles and Cost-Sharing Arrangement: LCCC and ESC, both owned by the Secretary of State for Business, Energy and Industrial Strategy (BEIS), perform central functions in the operation of the Contracts for Difference and Capacity Market schemes. They work under a cost-sharing arrangement, with ESC primarily focused on making payments to Capacity Providers and managing credit cover and meter assurance.
2. Managing Fraud and Error: The document emphasises the importance of managing risks associated with fraud and error in the disbursement of public funds. It suggests implementing a Know Your Customer (KYC) process post-award and monitoring performance during the Delivery Year, including the suspension of payments if necessary.
3. Recommendations for Policy Changes: The response includes recommendations to ensure the Capacity Market remains fit for purpose. These include maximising competition, promoting cost-reflective outcomes, facilitating innovation, and maintaining coherence and simplicity in market arrangements. It also advocates for an alignment of approach across schemes and sufficient time for delivery partners to develop system solutions once rule changes are finalised.