EUAA Submission: Capacity Mechanism High Level Design Paper

EUAA Submission: Capacity Mechanism High Level Design Paper

Emily Wood | July 22, 2022

‘…We welcome the opportunity to make a submission to the Capacity Mechanism High-Level Design Paper (Design Paper). We have already made a submission to Project Initiation Paper (February 2022) and are pleased to see that a number of issues we raised have been reflected in the Design Paper, although much more work needs to be done on detailed design and cost benefit analysis before consumers can be sure that a capacity market will deliver promised benefits.

Based on member feedback and our own experience to date, the true nature of the problem we are trying to solve has not been made abundantly clear. That is not to say some form of capacity market is not required (we expand on this later) but more specifically what is the duration of capacity gap that we are concerned will not be met with existing market settings. This Design Paper starts to answer some, but not all of these questions.

The current EUAA view is that short duration capacity, or intra-day capacity gaps (i.e. up to 4 hrs), may well be met with existing (FCAS) and emerging (ESS) market settings (along-side energy market revenue) and that a capacity payment would simply represent an over-payment to those technologies. Our current view therefore is that the true problem is the longer duration (6+ hrs), or inter-day capacity gaps that may continue to emerge…’

Download attachment to read full submission.

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