Commenting on the recent suspension of the Capacity Market, Sebastian Blake, Head of Markets & Policy at Open Energi, said:
“There have always been flaws in the Capacity Market, not least that it solves a problem which doesn’t yet exist. There is much evidence to suggest that the UK is well supplied with capacity – borne out by the low prices seen in the CM – and that grid resiliency is better served by a decentralised system able to run more intelligently and efficiently.
The suspension of the CM at a time when the mechanism was coming under review anyway provides an opportunity to address some of these flaws and deliver a market where demand-side technologies can compete fairly with incumbent generators and advance the UK’s shift to a smarter, cleaner, more affordable energy future.
It is possible we will see greater price volatility while the future of the CM is determined but flexibility providers who display an appetite for merchant risk are well placed to take advantage of market-based opportunities to deliver increased value to clients.”