<article data-sf-ec-immutable=""><section><p>Energy analysis: Anna Sweeney, senior knowledge lawyer in the infrastructure, projects and energy team at Addleshaw Goddard, outlines the government’s latest consultations on the capacity market (CM) and explains what’s coming next.</p></section></article><section><section><h2><mark id="CITEID_684927"></mark>What is the current status of the CM?</h2></section><section><p>The UK CM is currently in a standstill period following the ruling in <i>Tempus Energy and Tempus Energy Technology v Commission</i>, Case <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/energy/document/412012/8V4T-XNB2-8T41-D4G7-00000-00/linkHandler.faces?psldocinfo=What_does_the_future_look_like_for_the_capacity_market_in_the_UK_&linkInfo=F%23GB%23T%23sel1%252014%25year%252014%25page%25793%25&A=0.48286984056174576&bct=A&ps=null&risb=&service=citation&langcountry=GB" target="_parent">T-793/14</a> by the General Court of the EU that annulled the European Commission’s 2014 decision that the CM scheme was compatible with state aid rules. This means that the European Commission now has to carry out an in-depth investigation to assess whether the CM scheme is compatible with the state aid rules (the European Commission has also appealed against the court’s ruling). The investigation began on 21 February 2019 and could take up to 18 months.</p><p>On 22 March 2019, the European Commission <a data-sf-ec-immutable="" href="http://bit.ly/2UbHmth" target="_blank" title="Opens in a new window">announced</a> that it had preliminarily concluded that the UK CM contributes to an ‘objective of common interest’ and is necessary. The European Commission has invited parties in the UK to submit their comments and to provide all information that may help assess the measure as part of its investigation. Comments are required to be submitted by 22 April 2019.</p><p>BEIS has welcomed the European Commission’s preliminary conclusion that ‘the UK CM contributes to an objective of common interest and is necessary’ and is confident that the investigation will determine that the CM is fully compliant with state aid rules upon a full review of the evidence. However, the European Commission wants to know from demand side response (DSR) providers whether they think that the CM is disadvantaging them compared to generators, since DSR providers can only bid for shorter capacity contracts. It also seeks views on whether the CM should be open to direct foreign generator participation, not just through interconnectors bidding for capacity.</p><p>Until the CM regains state aid approval (and there is no guarantee that </p></section></section>
Source: LexisNexis Purpose Built
What does the future look like for the Capacity Market?
