IPPR has published a report this week which tells us ‘why the Capacity Market is not working, and how to reform it’. A very good piece of work, which is well worth a read. I’m not going to go into an exposition of the report and its findings, because you can do that for yourself here. I’m sure the authors of the report were too busy putting the finishing touches to their opus to notice a question I put to the Minister of State for Energy in the last DECC oral questions before Easter Recess. I asked her, since the Department has not published an impact assessment for its latest consultation on proposals to ‘reform’ the capacity market and bring forward a year’s new capacity purchase this winter, what she thought the cost to bill payers of this would be, and whether she thought it would have the effect of actually procuring more long term contracts for new power stations (the original main purpose of capacity auctions). This last part is, after all, primarily why the capacity auctions are not working, which is that, so far, auctions have succeeded in procuring precisely no viable 15-year capacity contracts to ensure the building of new gas-fired power stations.
Alan Whitehead’s Blog 4th May 2016 read more »