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SAU to prepare report on DESNZ’s proposed Capacity Market changes

Renewable Energy

On Thursday 22 February, the Competition and Markets Authority (CMA) reported that the Subsidy Advice Unit (SAU) has accepted a request for a report from DESNZ concerning its proposed Capacity Market (CM) scheme. According to the CMA, the SAU will prepare a report evaluating DESNZ’s assessment of whether the subsidy scheme complies with the subsidy control requirements. As the CM was originally designed as a temporary mechanism, with approval for a ten-year period, DESNZ is looking to change this ten-year approval limit to enable its continued operation. It is also proposing to implement several policy measures to improve security of supply and align the scheme with net zero. These changes were consulted on in October to December 2023 and DESNZ is currently considering the responses received. The CMA noted that a small number of changes, including the removal of the ten-year limit, are likely to be more than administrative or legacy modifications and so the scheme has been referred to the SAU prior to implementation. The final SAU report is expected to be published on 5 April 2024.

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