Electricity Generation
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the potential impact of instances in the Capacity Market where consumers paid for capacity that did not materialise.
Answered by Michael Shanks
The Department has not made an assessment of this scenario because Capacity Providers are not paid for capacity that does not build out and therefore there is no cost to consumers. Payments under the Capacity Market are only made after a Capacity Provider has demonstrated that it is available to deliver. Where existing capacity fails to demonstrate availability or deliver during its obligation period, payments are suspended and the relevant Capacity Agreement is terminated.
From a security of supply perspective non delivery risk is factored into the way that targets are set within the Capacity Market based on historic data. This ensures that we can have confidence that we are securing the right level of capacity needed to maintain electricity security through a range of scenarios.
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