Capacity Market T-4 results

Does new gas capacity displacing nuclear accelerate need for market reform?

Does new gas capacity displacing nuclear accelerate need for market reform?

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There continues to be an oversupply in the Capacity Market (CM). Going into the T-4 auction, existing generation and interconnector capacity combined were greater than the target capacity meaning that existing plant would have to close if new capacity was to be required. 

Gas capacity has displaced nuclear growth and in a year where the UK have a significant international platform in the form of COP26 in November, it’s difficult to see how the issue of market reform can wait any longer. Whilst the current consultation is welcome, the focus is on technical rather than strategic change to the mechanism.

The Government need to urgently consider more significant reform to the CM to prevent it compromising its ability to achieve now legislated decarbonisation targets. A system continuing to rely on unabated natural gas and renewables will obviously not deliver a zero carbon power system.

You can read our analysis here to understand what the key headlines are and whether the results suggest a need for market reform. 

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