Introduced in 2014, the Capacity Market plays a critical role in maintaining the security and reliability of Great Britain’s electricity system. As the energy transition accelerates and renewable generation continues to grow, the market provides a mechanism for ensuring sufficient reliable capacity is available during periods of peak electricity demand.
Participation is open to a broad range of assets, including new and existing generation, on-site generation such as combined heat and power (CHP), battery energy storage systems, and a growing number of flexible demand-side assets. Technologies such as heat pumps, refrigeration systems, HVAC, industrial processes and controlled lighting can all contribute, creating new revenue opportunities for businesses able to provide flexible capacity.
This guide explains how the Capacity Market works, outlines the different auction mechanisms and highlights the commercial opportunities available to organisations with eligible assets. Whether you operate generation, storage or flexible electrical demand, understanding the Capacity Market is an important step towards unlocking additional value from your energy infrastructure.