Capacity Market Units: Consultation on Location Changes

I am tabling this statement to inform members of the publication of a consultation response relating to the capacity market titled “Government response to consultation on proposal regarding locational changes of capacity market units”. It sets out the Government’s intention to amend the rules that allows for notification of a change of address in the CM to prevent new build capacity market units and DSR CMUs from changing address between prequalification and delivery. This change will apply to all future CM agreements starting from prequalification 2026.

The Government recognise that the ability to change components is necessary for DSR CMUs. It is worth noting that only five change of address requests have been made by DSR units under the rule being changed through this consultation, and the rules will still have options for DSR CMUs to change component addresses after these changes have been made. Unproven DSR can notify component addresses ahead of the delivery year through rule 8.3.3a and proven DSR can reallocate components within the delivery year under rule 8.3.4.

Since its introduction in 2014, the CM has secured reliable capacity for when there is greater demand for electricity in Great Britain. This capacity is acquired through competitive annual auctions held four years and one year ahead of their respective delivery years. The Government regularly amend the framework underpinning the capacity market before auction cycles to ensure it is fit for purpose, cost-effective and meets broader strategic objectives such as clean power by 2030.

The Government intend to introduce these changes for the 2027 auctions coming into force for prequalification in summer of 2026. This will give participants clarity and certainty ahead of their entrance into prequalification and allow them to adapt to the changes the Government have made.

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