Draft Electricity Capacity (Amendment) Regulations 2023

Kerry McCarthy Excerpts

Tuesday 18th July 2023 General Committees

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to see you in the Chair, Mr Robertson. I say at the outset that we will not oppose the Government in bringing forward the amendments, but I am going to speak for about half an hour about why we will not—[Laughter.] No, I will not.

We accept that the changes should be made and they are of very minor significance to the scheme overall. To recap, the capacity market is currently the main system in place for securing a stable and reliable electricity system. Generally, the system works well in providing secure provision. It provides commitments by generators to supply guaranteed power into the system, allowing those balancing the system to know in advance what capacity they can rely on for each period. A system of fines is in place for generators that have committed themselves to supply but then do not deliver when required.

It is worth noting that suppliers have to agree to deliver power only if required. They still get paid for the capacity agreement if they are not required to deliver power. I can see why that might be the case—we do not want to disincentivise them—but there is an element of free money in the system, and that needs revisiting at some stage.

I will not repeat the Minister’s explanation of the three amendments that are being introduced, other than to comment that the second amendment, to regulation 34, simply gives effect to something that was for practical purposes always the case, as the low carbon contracts company was never in a position to know whether the capacity market holding generator would be successful in a CfD bid.

As I said, we do not have a problem with any of the amendments, so we will not seek to divide the Committee.