Capacity Market ‘wasteful, thoughtless and parochial’

Professor Catherine Mitchell, Professor of Energy Policy at the University of Exeter says that the Government’s first Capacity Market auction, which published results today, was ‘wasteful, thoughtless, parochial and supporting the status quo’.


Professor Mitchell said: “The vast majority of payments under the Capacity Market will go to the large, well-known generators. They have done a great job in persuading Government that unless customers pay this extra amount it would be uneconomic for them to keep the power plants running and the lights will go out.

“Government should never have fallen for it and they should never have designed the Capacity Market in this way.

“Without doubt, the Capacity Market, if it is to continue, has to be completely rethought. All of this money would have been far better used to develop a sensible demand side response market.”

Professor Mitchell said that in the US, PJM, the largest grid company in the northeast, manages a capacity market which saves consumers billions of dollars and drives down prices by maximizing use of demand side response, under which customers agree to use power flexibly, and interconnection with other grids.

Professor Mitchell said: “DECC’s auction reflects the UK’s current energy policy: wasteful, thoughtless, parochial and supporting the status quo. This was a real opportunity to implement a radically different, demand focused mechanism and we blew it. Happy Christmas, electricity companies and customers.”