Electricity Market Reform

What is Electricity Market Reform?

On 1 August 2014 new legislation was passed by the Government introducing new costs in to the electricity market. This was through a package of measures known as Electricity Market Reform (EMR).

What are the benefits of reform?

The reformed electricity market will deliver the greener energy and reliable supplies that the country needs, while minimizing costs for consumers in the long term. It will transform the UK electricity sector to one in which low-carbon generation can compete with conventional, fossil-fuel generation – ensuring we build a cleaner, more sustainable energy mix.

EMR is designed to:

Decarbonize electricity generation

Keep the lights on

Minimize the cost of electricity to consumers

Electricity Market Reform: Capacity market

What is the capacity market?

Capacity represents the need to have adequate generating resources to ensure that the demand for electricity can always be met. In a capacity market the utility or other electricity supplier are required to have enough resources to meet its customers' demand plus a reserve amount.

How will market reform support my business?

Part of the government’s Electricity Market Reform package, the Capacity Market will ensure security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when needed. This will encourage the investment we need to replace older power stations and provide backup for more intermittent and inflexible low carbon generation sources.

The Capacity Market has also been designed to support the development of more active demand management in the electricity market. For more information visit GOV.UK

 

 
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