Capacity contracts in Great Britain's power market - ending the energy-only model

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Report summary

The European Commission has confirmed that the UK government’s proposed Capacity Market (CM) complies with EU state aid rules. As coal plants are retired and renewable supply grows, the CM is aimed at providing medium to long-term security of power supply in Great Britain. The first CM auction will be held in December 2014 - for delivery of capacity in 2018. Capacity contracts represent a substantial intervention in the sector, bringing an end to the existing energy-only power market model.

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