Question

To ask the Secretary of State for Energy and Climate Change, what steps his Department has taken with Ofgem to achieve a Price Average Reference (PAR) of 1MWh in future Capacity Market auctions; and when he expects that PAR to be implemented.

I refer my hon. Friend to the answer given to Question 224767.

Under their Electricity Balancing Significant Code Review, Ofgem have committed to implement a 1MWh Price Average Reference (PAR) measure for imbalance (“cash out”) prices. Although this does not relate directly to the Capacity Market, Ofgem intend to implement changes to cash out ahead of 2018/19:

https://www.ofgem.gov.uk/ofgem-publications/87782/electricitybalancingsignificantcodereview-finalpolicydecision.pdf.

It is likely that expected changes to the Price Average Reference will already have been factored into Capacity Market auction bids.