As the high level details of the first Capacity Market auction have now been published, Capacity Market participants that wish to participate in this year's auction (in respect of the 2018 delivery year) will need to ensure that they are in a position to prequalify for the auction within the short prequalification window, which is due to open imminently.

The Capacity Market auction parameters have recently been published by Edward Davey, Secretary of State for Energy and Climate Change. The UK Government intends to procure a total of 53.3 GW of electricity generating capacity for this year's auction, in respect of the delivery year commencing October 2018. The auction clearing price is capped for all participants at £75/kw. The bid threshold for existing generators (subject to certain exceptions) is £25/kw, although all participants remaining in the auction at the time the auction closes will receive the clearing price.

The Capacity Market auction guidelines have also been published by National Grid. These guidelines propose that the prequalifcation will open on 4 August 2014 and close on 15 August 2014. Clearly this leaves potential Capacity Market participants with little time to collate and submit the prequalification information required, obtain internal approvals and submit a prequalification application to National Grid.

  • Prequalification Window opens - 4 August 2014
  • Prequalification Window closes - 15 August 2014
  • Prequalification Results Day - 26 September 2014
  • Auction - 9 December 2014