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In the meantime, at the request of the UK Government, National Grid and Electricity Settlements Company continue to operate the Capacity Market programme to ensure that capacity providers can benefit from deferred payments after the standstill period (subject to State aid authorisation). Additional steps are being taken to verify the continuity of billing agreements for suppliers. As part of the government`s electricity market reform, the capacity market will ensure security of electricity supply by providing, in addition to electricity revenues, a payment for reliable capacity sources to ensure that they provide energy if needed. This will encourage the investments we need to replace older power plants and provide backup for more intermittent and less flexible low-carbon generation sources. This gives suppliers (as anticipated by the recent announcement of Ofgem`s price cap) the certainty that they can and should make arrangements by maintaining the supplier`s fees by customers during the standstill period, and CM contract holders that deferred payments can be financed immediately and in full after the expiry of the standstill period. Trade does not alter the obligation of one of the two Capital Markets Unions. It is considered that the buyer has fulfilled his obligation by combining his own production and the service designated by other CMUs. The seller would not receive transfer payments from MW transferred to another Capital Markets Union. The capacity market has also been developed to support the development of more active demand management in the electricity market.

The government has set up the capacity market (CM) as part of its policy of reforming the electricity market. It aims to encourage investment in more sustainable and low-carbon electricity capacity at the lowest cost to energy consumers. This is necessary to ensure the supply of electricity in the future. The capacity market ensures security of electricity supply by providing payment to reliable sources of capacity. The receiving party must have successfully pre-qualified for an auction for that delivery year or for ancillar activities for that delivery year. They cannot have received a commitment through the capacity auction (unless they have a commitment for capacity below their devalued capacity). Note: On 15 November 2018, payments under the capacity market mechanism and future support to the capacity market were suspended. This is explained by the fact that: that the General Court delivered its judgment in Tempus Energy Ltd and Tempus Energy Technology Ltd v Commission (Tempus judgment (see LNB News 15.11.2018 90 for the examination of the judgment itself) angling the Commission`s decision of 23 July 2014 finding that the aid scheme for the establishment of a capacity market in the United Kingdom complied with EU State aid rules. Electricity Capacity (Amendment) Regulations 2016 amends the Electricity Capacity Regulations 2014 (S.I. 2014/2043) in order to set up an additional auction on the capacity market (the auction of additional capacity) for delivery in 2017/2018; an increase in termination costs and credit coverage to be paid under the capacity market system; make arrangements for the transfer of bonds out of the capacity market; and to make a number of other changes, in particular with regard to the second transitional auction for the capacity market; and make minor changes to electrical capacity (payment from suppliers, etc.) Ordinances 2014 (S.I. 2014/3354).

The capacity market (CM) is an aspect of the National Electricity Market Reform Programme (RMS). .

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