Matthew Lockwood, IGov Team, 9 October 2014
Back in August, my colleague Catherine Mitchell wrote about Britain’s new Capacity Market being introduced as part of the Electricity Market Reform package. National Grid has now released figures on what capacity has pre-qualified for the CM:
Apart from the point made by Greenpeace and Sandbag that the CM looks likely to prop up our old coal-fired capacity, what is particularly disappointing but not surprising is the picture on demand-side response. In total, just over 1 GW of DSR units applied for pre-qualification, of which around 794MW has been pre-qualified or conditionally pre-qualified, and which is represented in the thin purple wedge in the figure above. Rejected units may still prequalify on appeal, but this is still a paltry amount.
Qualifying DSR represents less than 1% of GB peak capacity, compared with the 10% of peak capacity actually delivered by DSR in the PJM market in the US. It is of course early days, but given the extensive experience of DSR in the US, it does appear that few lessons have been learned in terms of auction design and the need to proactively build the DSR market.
Overall these figures reinforce the view that the CM is about keeping the past alive rather than facing the future.