Consultation response: Capacity Market Review – Call for Evidence 1

ClientEarth argues that the UK's Capacity Market (CM) may be over-procuring capacity and risks subsidising fossil fuels, thereby undermining the coal phase-out and the Paris Agreement. The organisation recommends making Emissions Performance Standard (EPS) and LCP BREF compliance mandatory for CM entry, removing very long-term contracts to prevent fossil-fuel lock-in, and reducing financial barriers for demand-side response (DSR) and storage. It further suggests introducing a specific 'climate and competition' objective for the CM and reforming the cost-recovery methodology to provide sharper price signals for DSR. ClientEarth also calls for an independent resource adequacy assessment that accounts for the growth of distributed energy resources and interconnection.

• The UK government may be over-procuring capacity, as Ofgem's 2017 State of the Market Report indicates that National Grid has consistently overestimated the capacity gap and that out-of-market actions have occurred less frequently than the Reliability Standard predicted.
• The current Capacity Market design may undermine the UK's coal phase-out and climate goals; ClientEarth proposes that compliance with the Emissions Performance Standard (EPS) and the Large Combustion Plant Best Available Techniques reference document (LCP BREF) should be a prerequisite for CM entry.
• Long-term contracts (specifically those over five years) risk creating 'fossil fuel lock-in' by incentivising the construction of new gas or biomass plants that remain in place for decades, potentially foreclosing the market to cleaner innovations.
• Financial barriers, such as the 2MW minimum size threshold and the application of bid bonds to entire capacities rather than just unproven elements, disproportionately hinder new entrants like demand-side response (DSR) and storage providers.
• The 'smeared' cost-recovery methodology for the Supplier Obligation dampens price signals, which masks the potential of DSR to reduce demand spikes and may encourage the use of harmful onsite diesel generators.
• ClientEarth recommends adding a new 'Climate and competition' objective to the CM to facilitate the expansion of capacity providers that do not harm human health or the environment, noting that current wording regarding the 'decarbonisation agenda' is insufficient.

APA

Bright, S. (2018). Consultation response: Capacity Market Review – Call for Evidence 1. ClientEarth. https://www.clientearth.org/media/u45nyzub/uk-capacity-market-review-xxx-clientearth-response-to-beis-call-for-evidence-oct-2018-ce-en.pdf

Chicago

Bright, Sam. Consultation response: Capacity Market Review – Call for Evidence 1. ClientEarth, 2018. https://www.clientearth.org/media/u45nyzub/uk-capacity-market-review-xxx-clientearth-response-to-beis-call-for-evidence-oct-2018-ce-en.pdf.

Wikipedia

{{cite press release |last1=Bright |first1=Sam |title=Consultation response: Capacity Market Review – Call for Evidence 1 |publisher=ClientEarth |date=1 October 2018 |url=https://www.clientearth.org/media/u45nyzub/uk-capacity-market-review-xxx-clientearth-response-to-beis-call-for-evidence-oct-2018-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{bright2018consultation, author = {Bright, Sam}, title = {{Consultation response: Capacity Market Review – Call for Evidence 1}}, publisher = {ClientEarth}, year = {2018}, month = oct, url = {https://www.clientearth.org/media/u45nyzub/uk-capacity-market-review-xxx-clientearth-response-to-beis-call-for-evidence-oct-2018-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }