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New Capacity Market evidence lodged with European Commission as High Court date looms

Image: Getty.

Image: Getty.

Tempus confirmed that it had today (5 September 2019) lodged evidence with the European Commission to substantiate its claim that the Capacity Market unfairly discriminates against clean energy projects.

The mechanism has effectively been suspended since last November after a landmark verdict from the European Court of Justice that found the European Commission had erred in granting the CM state aid approval without a full investigation.

That evidence stems from the parliamentary Science and Technology Committee’s recent report into technologies necessary for emissions reduction, evidence which Tempus said had demonstrated how technology had “superseded policy design for keeping the lights on”.

In particular Tempus has pointed to comments made by National Grid ESO director of operations Duncan Burt, who suggested there was no technical reason as to why the CM could not make greater use of ‘non-generation’ technologies or suppliers.

Non-generation has been taken to refer to assets belonging to electricity customers – essentially distributed generation – which could benefit from CM contracts. This clashes with the current scheme, which Tempus says makes participation “almost impossible”.

The committee’s report goes on to suggest that non-generation suppliers should be eligible to bid for contracts of 15 years, just as how new generation facilities are. Tempus said it wholeheartedly agreed with that view, but would instead cap contracts at five years so as not to stifle competition.

Sara Bell, chief executive at Tempus Energy, noted how the government’s own position on the Capacity Market would appear to juxtapose evidence put forward within the committee’s report.

“That parliament should be at odds with the government does not seem surprising in the light of this week’s political events, but that BEIS itself is consulting about changes to the Capacity Market along the lines of those we have been fighting for in court, while still aggressively defending an opposing position in the High Court is absurd.

“It is this which shows our long legal battle, fighting for a fairer energy system, is entirely justified – we must support a cleaner energy future for customers and the environment. We are confident that this will bring an end to the free handouts fossil fuels are getting from this ill-advised scheme,” she said.

The next critical juncture for the case is in November, when Tempus’ High Court hearing starts.

Tempus escalated its case to the High Court in March this year after the Department for Business, Energy and Industrial Strategy (BEIS) made a series of decisions which Tempus said amounted to an unlawful attempt to keep the mechanism in place.

BEIS, for its part, said at the time it would “robustly defend” the challenge.

It believes the court will enforce its judgement legally, a development which would prove tricky for a government that has informed CM holders the scheme will be reinstated as early as next month.

Meanwhile, the European Commission’s investigation into the CM’s state aid approval is continuing. That investigation was formally launched in February this year and is not expected to conclude for another year.

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