EU approves UK capacity market, renewable support scheme

2014-07-24 18:00

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

London - The European Commission gave the go-ahead to Britain's proposed energy capacity market and a scheme to support renewable energy generation on Wednesday, paving the way for sweeping reform of the country's electricity market.

Britain is overhauling its electricity market to help deliver low-carbon energy and reliable electricity supplies as existing and ageing nuclear and coal plants go offline over the next decade.

The government plans to introduce a capacity market by the end of this year to ensure there is enough electricity generating capacity available at all times to meet demand.

The European Commission decided to look into the plans to make capacity payments to domestic power producers after Norway complained last year that its exporters would be excluded from the system.

However, it has found the scheme will contribute to ensuring Britain's energy supply security without distorting competition.

"The UK Capacity Market embraces the principles of technology neutrality and competitive bidding to ensure generation adequacy at the lowest possible cost for consumers, in line with EU state aid rules", Commission vice-president in charge of competition policy Joaquín Almunia said.

Keeping the lights on

The capacity market will offer all capacity providers - new and existing power stations and electricity storage operators - predictable revenue from capacity payments. In return, they have to deliver energy when needed or face penalties.

Environmental groups criticised the Commission's approval as pollutant-heavy coal plants will also be eligible to apply for capacity payments.

"The capacity market risks pushing up bills and holding up progress towards a decarbonised power sector by throwing money at the UK's old, dirty coal plants", said Jenny Banks at WWF-UK.

According to Brussels-based thinktank E3G on Wednesday, around 10GW of UK coal capacity could be in line for payments later this year and a further 5GW in the future.

The Commission has also gave the green light to the British government's so-called "contracts-for-difference" (CfD) scheme, which promotes renewable energy generation.

Under the CfD scheme, qualifying renewable energy projects will be guaranteed a minimum price at which they can sell electricity, replacing a mechanism for direct subsidy payments.

Almunia the scheme was a "fine example" of how to promote low-carbon energy with market-based support mechanisms, at the lowest possible cost for consumers.

The scheme will run for 10 years starting in April 2015, with a total budget of £15bn and selected projects will be able to receive support for up to 15 years.

The Commission also approved government investment contracts worth 9.7 billion pounds to five offshore wind farms under the CfD scheme.
Read more on:    renewable energy

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Man scores date with tennis superstar after Twitter bet

It’s a modern day Cinderella story, but one American man took ‘shoot your shot’ seriously in 2017.


You won't want to miss...

Who are the highest paid models of 2017?
10 gorgeous plus-sized models who aren't Ashley Graham
5 top leg exercises for men
10 best dressed men of 2017
Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.