The European Commission (EC) has announced that it has given the UK’s Capacity Market (CM) scheme approval to continue following an in-depth investigation.
It commenced its investigation after the General Court annulled its initial 2014 approval of the scheme, leading to it essentially being suspended, following an appeal by Tempus Energy in November 2018.
On 24 October, the EC confirmed that the Capacity Market, covering 2014-2024, complied with EU state aid rules and was necessary to guaranteeing security of electricity supply in the UK. Furthermore, it noted it fell in line with the EU’s energy policy objectives nor distorted competition in the Single Market. At the time of its appeal, Tempus Energy had argued that the mechanism favoured some form of generation of others, though the EC revealed it had found no evidence of the CM putting demand response operators and other capacity providers at a disadvantage.
In response, Tempus Energy criticised the investigation for being rushed – having commenced in February 2019 – and claimed the EC had given into industry pressure. Its statement further drew on the climate protests taking place around the UK and claimed that reinstating a scheme which supports coal and diesel is “beggar’s belief”. It is set to study the judgement and review further courses of action before commenting further.