Decision on the Delivery Body's review of the Relevant Balancing Services Guidelines 2024
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Capacity Market: Proposal regarding locational changes of Capacity Market Units
DESNZ proposes urgent changes to Capacity Market Rules regarding locational changes of capacity units, requiring rule modifications as soon as possible. The consultation aims to enhance scheme functionality and strengthen delivery assurance. This follows a separate broader consultation on Capacity Market Rules published recently.
This represents parameter adjustment within existing Capacity Market framework rather than structural reform. The emphasis on 'urgent' reform suggests current rules may be inadequate for managing locational changes, potentially creating delivery risks or gaming opportunities that require immediate closure.
Source text
The Capacity Market (CM) is regularly reviewed to ensure it remains fit for purpose, reflects changing market conditions and that the CM Rules ensure effective delivery and encourage participation to create competitive auctions.
The government has recently published a [consultation](https://www.gov.uk/government/consultations/capacity-market-proposed-changes-for-prequalification-2026) on proposed changes to the Capacity Market Rules and Regulations. Alongside this, an urgent reform has been identified which requires a change to the Capacity Market Rules as soon as possible. The proposal aims to enhance the functionality of the scheme and strengthen delivery assurance.
Capacity Market change proposals CP371, CP376, CP377, CP378, CP381: decision
Ofgem decision on Capacity Market change proposals CP371, CP376, CP377, CP378, CP381. Operative outcome of the January 2025 statutory consultation.
Operative rule changes for the Capacity Market. Each Change Proposal modifies how the CM operates; together they form a batch of design updates affecting auction clearing, de-rated capacity calculations, and participant behaviour.
Source text
Capacity Market change proposals CP371, CP376, CP377, CP378, CP381: decision | Ofgem
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Capacity Market change proposals CP371, CP376, CP377, CP378, CP381: decision
Publication type:
Decision
Publication date:
12 June 2025
Topic:
Electricity generation
Decision for:
Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381: statutory consultation
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CP371: Protection from Very Late Network Connections
CP376: Clarifying restrictions on the role of Agent
CP377: Increasing flexibility for SPD Portfolios
CP378: Removing 50MW Limit on Individual CMUs in a Portfolio
CP381: Change to the definition of SCEC in Rule 3.5.5
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This letter sets out our decisions on changes to the Capacity Market Rules (the “Rules”) pursuant to Regulation 77 of the Electricity Capacity Regulations 2014 (the “Regulations”). These decisions follow our Statutory Consultation of Capacity Market Rules change proposals CP371, CP376, CP377, CP378 and CP381 issued on 9 January 2025.
These Rule changes will come into effect when laid before Parliament, ahead of the 2025 Prequalification Window. Appendix 1 sets out our changes to the Rules.
Main document
Decision on Capacity Market change proposals CP371, CP376, CP377, CP378, CP381 [PDF, 523.32KB]
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CP371: Protection from Very Late Network Connections
CP376: Clarifying restrictions on the role of Agent
CP377: Increasing flexibility for SPD Portfolios
CP378: Removing 50MW Limit on Individual CMUs in a Portfolio
CP381: Change to the definition of SCEC in Rule 3.5.5
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Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381: statutory consultation
Ofgem statutory consultation on Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381. Each Change Proposal modifies Capacity Market Rules; together they form a routine batch of CM design updates.
Capacity Market Rule changes affect how the CM auctions clear, what counts toward de-rated capacity, and how participants behave. CP371-381 batch indicates a substantial set of updates being processed; the individual rule changes determine the consumer-cost trajectory through the CM. The CM is the second-largest consumer-funded support scheme after CfD.
Source text
Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381: statutory consultation | Ofgem
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Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381: statutory consultation
Publication type:
Consultation
Publication date:
9 January 2025
Closed date:
19 February 2025
Status:
Closed (with decision)
Topic:
Electricity generation
Decision:
Capacity Market change proposals CP371, CP376, CP377, CP378, CP381: decision
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Related links
CP371: Protection from Very Late Network Connections
CP376: Clarifying restrictions on the role of Agent
CP377: Increasing flexibility for SPD Portfolios
CP378: Removing 50MW Limit on Individual CMUs in a Portfolio
CP381: Change to the definition of SCEC in Rule 3.5.5
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This Statutory Consultation outlines five Change Proposals in the Capacity Market, CP371, CP376, CP377, CP378, and CP381:
CP371 amends Capacity Market Rules in situations where a Transmission Licensee/Distribution Network Operator delays a connection date
CP376 clarifies a rule to ensure that those with the ability to bid in the Capacity Market auctions are acting independently so that the market remains competitive
CP377 allows for greater flexibility to meet Satisfactory Performance Days
CP378 removes the 50MW connection capacity limit on Capacity Market Units being part of a Capacity Market Unit Portfolio; and introduces a requirement for each Capacity Market Unit within a Capacity Market Unit Portfolio to exceed a minimum proportion of their Capacity Obligation
CP381 provides an alternative for how Station Connection Entry Capacity is determined in the Capacity Market rules
Respond name
Jack Britton
Respond email
jack.britton@ofgem.gov.uk
Main document
Statutory Consultation on Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381 [PDF, 602.27KB]
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CP371: Protection from Very Late Network Connections
CP376: Clarifying restrictions on the role of Agent
CP377: Increasing flexibility for SPD Portfolios
CP378: Removing 50MW Limit on Individual CMUs in a Portfolio
CP381: Change to the definition of SCEC in Rule 3.5.5
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Ten-year Review of the Capacity Market Rules
Ofgem ten-year review of the Capacity Market Rules. The CM has run since 2014; ten years of operation provides a body of evidence on whether the rules are delivering their intended outcomes.
Decadal review of one of the two largest consumer-funded generator support schemes (alongside CfD). The CM has been criticised for extending the life of fossil capacity, paying for capacity that would have stayed in the market anyway (the Stigler/Peltzman point about concentrated benefits), and clearing-price volatility. A ten-year review is a moment to ask whether the design still fits the system, not just whether to tweak parameters.
Source text
Ten-year Review of the Capacity Market Rules | Ofgem
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Ten-year Review of the Capacity Market Rules
Publication type:
Reports, plans and updates
Publication date:
5 December 2024
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Report on our Five Year Review of the Capacity Market Rules and Forward Work Plan
Ten-year review of the Capacity Market Rules - consultation
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In January 2024 we consulted on our Ten Year Review of the Capacity Market Rules (“Rules”). This consultation invited stakeholders to provide feedback on proposed amendments to the Rules, as well as respond to wider policy questions on the Capacity Market framework.
The report includes responses to that consultation alongside the official view of the Authority. Furthermore, the report includes a summary of Capacity Market Rules that require further investigation. Ofgem continue to proactively seek solutions to the issues raised here.
This document is intended to meet the requirements of Regulation 82 of the Electricity Capacity Regulations 2014 (“Regulations”) and Rule 15.2 of the Capacity Market Rules 2014, which require the Authority to carry out a review of the Rules every five years. The previous Five Year Review was published in July 2019.
Main document
Ofgem 10 Year Review of the Capacity Market Rules [PDF, 250.37KB]
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Related links
Report on our Five Year Review of the Capacity Market Rules and Forward Work Plan
Ten-year review of the Capacity Market Rules - consultation
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Capacity Market: Rule Amendments to support Auction Liquidity
DESNZ proposes rule changes to prevent emissions verification deadlines from reducing Capacity Market auction liquidity. The changes include conditional deadline extensions for generators required to submit verified emissions declarations at prequalification. This addresses administrative bottlenecks that could force viable capacity out of auctions due to paperwork delays rather than economic merit.
This is process improvement rather than market reform — fixing an administrative problem that creates artificial scarcity in capacity auctions. As such, it maintains the existing market structure while removing a bureaucratic constraint that reduces competition.
Source text
This consultation seeks views on proposals designed to tackle potential risks which have been identified since the commencement of Capacity Market emissions verifications. This is to ensure auction liquidity is not needlessly adversely affected by the verification process.
The consultation includes a proposal to introduce a conditional deadline extension for CM applicants which are required to submit a verified emissions declaration at prequalification, as well as other amendments and improvements to ensure the functionality of the verification process.
Read the [consultation document on GOV.UK](https://www.gov.uk/government/consultations/capacity-market-rule-amendments-to-support-auction-liquidity).
Decision on the Delivery Body's review of the Relevant Balancing Services Guidelines 2024
Ofgem approves revisions to the Relevant Balancing Services Guidelines proposed by the Capacity Market Delivery Body for 2024. The decision letter outlines which specific changes have been accepted to the technical guidelines that determine which balancing services are relevant for capacity market participation.
Parameter adjustment to existing capacity market rules rather than structural reform. The guidelines determine which balancing services count towards capacity market obligations, as such minor revisions affect compliance costs for capacity providers but do not change market design fundamentals.
Source text
Decision on the Delivery Body's review of the Relevant Balancing Services Guidelines 2024 | Ofgem
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Decision on the Delivery Body's review of the Relevant Balancing Services Guidelines 2024
Publication type:
Decision
Publication date:
25 March 2024
Topic:
Electricity transmission
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This letter outlines our decision on revisions proposed by Capacity Market Delivery Body to the Relevant Balancing Services Guidelines for 2024.
Main document
Decision on the Delivery Body's review of the Relevant Balancing Services Guidelines 2024 [PDF, 104.29KB]
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This consultation is open for responses
Respond to this consultationSummary
DESNZ: Capacity Market: Proposal regarding locational changes of Capacity Market Units; Capacity Market: Rule Amendments to support Auction Liquidity Ofgem: Capacity Market change proposals CP371, CP376, CP377, CP378, CP381: decision; Capacity Market Rule change proposals CP371, CP376, CP377, CP378 and CP381: statutory consultation; Ten-year Review of the Capacity Market Rules; and 1 more