Draft Electricity Capacity (Amendment) Regulations 2025

Andrew Bowie Excerpts

Tuesday 4th February 2025 General Committees

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is a pleasure to serve under your chairmanship this morning, Mr Twigg. It is a day full of energy; we cannot get enough energy—in all respects, I suppose.

As we discussed just a few weeks ago with regards to the Electricity Capacity Mechanism (Amendment) Regulations 2024, the capacity market scheme was introduced in 2014 as part of electricity market reform, to ensure security of electricity supply by providing payments for reliable sources of electrical generation capacity or, in some cases, reduced demand.

The capacity market is responsible for ensuring that the right incentives are in place to deliver during periods of electricity system shortage and stress. As we mentioned when the previous amendments were introduced in November, the previous Government identified over a decade ago that, while introducing renewable energy sources into the energy mix,

“The amount of gas capacity we will need to call on at times of peak demand will remain high, with potentially significant amounts of new gas generating capacity required by 2030.”

As we saw in the January cold snap, a renewables-dominated system does indeed come under considerable stress. When the wind does not blow and the sun does not shine—as it often does not in the UK, especially in the winter—we experience a dearth in the supply of renewable-generated electricity. That is compounded by high demand on the coldest, darkest days.

The draft instrument aims to improve security of supply and expedite investment in low-carbon technologies. It seeks to amend the timeframe for the Electricity Settlements Company’s determinations, bringing those adjustment decisions in line with the timeframe for penalty charges. It also seeks to use multi-year agreements to provide certainty, incentivising a greater range of technologies to participate. On that basis, and also because it was the previous Government who began this work, I do not wish to oppose the draft instrument.

I shall not stand in the way of business today, as the draft instrument seeks to make only minor adjustments to the capacity market. However, as before, I do wish to put on record the Opposition’s apprehensions regarding an increasingly intermittent energy system, shored up by increasingly expensive capacity market payments. As I said, however, we support these moves today.

Question put and agreed to.