BEIS seeks to relax obligations and deadlines for back-up power providers to 'reduce administrative and operational burdens' amid pandemic
The government is seeking to relax obligations and deadlines for electricity generators holding contracts to provide back-up power for the UK grid, in a bid to "reduce administrative and operational burdens" on firms under strain due to the coronavirus crisis.
A quick-fire consultation published on Friday seeks views on proposals to temporarily modify the rules of the Capacity Market, the government's flagship scheme designed to ensure the lights are kept on across the UK during peaks and troughs in power demand throughout the year.
Proposed changes would see contract deadlines and obligations relaxed and back-up power producers given more time to lodge appeals in order to "minimise the likelihood of terminations" to contracts with providers, the Department for Business, Energy and Industrial Strategy (BEIS) said.
The government said it was "considering ways to reduce burdens on agreement holders as they focus on dealing with the impact of Covid-19 on their businesses".
"The objective is to minimise, as far as possible, the risk of terminating and imposing termination fees on capacity providers that fail to meet an obligation as a result of the Covid-19 pandemic," it explained.
The week-long consultation, which closes on Thursday, is "necessarily much shorter than the usual period of at least four weeks", as the targeted proposals "need to take effect quickly, so they are in place to assist capacity providers as soon as possible," the consultation document states.
"That said, security of electricity supply remains a key overarching objective for the government and, therefore, any amendments must not undermine this objective," it adds. "Any easements will be temporary and will only remain in place as long as necessary."
The move follows a chaotic year for the government's Capacity Market in 2019, which saw the auction scheme suspended while the EU carried out an investigation into whether it breached State Aid rules amid accusations that it unfairly favoured fossil fuel generators.
However, the scheme was given the green light by the EU to be restored last October, allowing for back-up power generators previously awarded contracts for supply back up capacity to receive the near £1bn of payments suspended while the probe was ongoing.
The scheme is widely regarded as crucial to ensuring grid stability as the UK transitions to an enegry system that is more reliant on variable renewables. The current coronavirus crisis has given a snap shot of how grids operate with a higher share of renewable power, as reductions in demand caused by lockdown restrictions has led to renewables consistently commanding a record share of the power mix.
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