Capacity Market December 2024 Consultation and Call for Evidence
This consultation is open for responses
Respond to this consultationSummary
DESNZ proposes changes to Capacity Market rules to improve demand side response (DSR) participation and delivery assurance. The consultation covers DSR technology categorisation and testing processes. The proposals aim to better integrate consumer-led flexibility within existing capacity procurement.
Why it matters
This addresses the perennial problem of DSR underperformance in capacity auctions — demand side participants can bid low because their delivery risk is socialised across all consumers through the capacity mechanism. Better assurance processes may reduce this moral hazard, though the consultation does not propose fundamental changes to how DSR bids are backed or penalised.
Key facts
- •Focuses on demand side response categorisation and testing improvements
- •Published December 2024
- •Consultation seeks views on modernising Capacity Market Rules
Areas affected
Related programmes
Memo
We’re seeking views on proposed changes to the Capacity Market to modernise Capacity Market Rules and improve the participation and delivery assurance of consumer-led flexibility (via Demand Side Response mechanisms). We are also seeking views on improving consumer-led flexibility in the Capacity Market by improving categorisation of Demand Side Response technologies and the assurance processes surrounding testing and delivery