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EU investigation into energy capacity mechanisms launched
The European Commission have launched a state aid investigation into the impact capacity mechanisms have on the working of the EU's single energy market. The Commission said it would probe the workings of 11 capacity markets from the following EU countries, Belgium, Croatia, Denmark, France, Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden. However if any distorting affects are discovered, the investigation could be extended to other member states, including the UK.
The inquiry will gather information on capacity mechanisms to examine, in particular, whether they ensure sufficient electricity supply without distorting competition or trade in the EU Single Market. In particular, the sector inquiry will enable the Commission to:
- Collect the views not only of Member State authorities, but also of stakeholders such as electricity generators, suppliers, network operators and demand response providers to inform the Commission of problematic issues;
- Identify design features that may distort competition between capacity providers (e.g. between power generators and demand response operators) and distort cross-border trade;
- Promote competitive and market-based capacity mechanisms that complement the internal energy market rather than divide it; and
- Ensure Member States respect state aid rules when designing and implementing capacity mechanisms.
The sector inquiry will also support future policy and legislative initiatives by providing a clearer picture of issues in this area. In particular, the Commission is considering the development of an EU-wide harmonised framework for assessing the adequacy of the electricity system, and its ability to meet demand. For more information about this, click here and/or here.
If you are interested in techUK looking at this investigation in more detail on the back of the findings from SmartGrid GB's (a techUK partnership organisation) report into the UK Capacity Market and the potential it could hold for DSR, please get in contact with me ASAP.
