Government sets out plans to relax Capacity Market rules in response to COVID-19

The government is seeking views on temporarily altering Capacity Market rules during the COVID-19 pandemic.

On 24 April, it published a consultation, explaining that it has been considering ways to reduce burdens on agreement holders as they focus on dealing with the impact of the outbreak on their businesses. It stressed, however, that security of supply “remains a key overarching objective” and any amendments must not undermine it.

Under the government’s proposals, contract deadlines and obligations would be relaxed, reducing administrative and operational burdens, in a bid to minimise the likelihood of terminations arising from the COVID-19 outbreak. Its approach would also see the appeals process altered, offering capacity providers a greater amount of time to appeal, while also ensuring the Secretary of State is given greater discretion to extend the time for capacity providers to achieve compliance. The government noted it is also considering creating a new termination ground where non-compliance from the impacts of the COVID-19 pandemic, or related restrictions, which would not carry a termination fee.

It added that despite these measures, capacity providers experiencing delays or difficulties in meeting their obligations due to COVID-19 or related restrictions are “strongly” encouraged to communicate them as early as possible to the Delivery Body and to continue providing the Delivery Body with regular updates.

The consultation will close on 30 April at 11.45PM.