Capacity Market

The Capacity Market (CM) is part of the UK Government's Electricity Market Reform package.

The Capacity Market (CM) was introduced by the UK Government to manage security of electricity supply and safeguard against the possibility of future blackouts.

CM participants are paid to ensure they’re available to respond when there is a high risk that a System Stress Event could occur. This happens very rarely. The vast majority of the time, participating assets operate as they normally would.

To earn CM revenue for our customers, we take their assets into capacity auctions where the price is set. Providers who are successful in the auction(s) are awarded a Capacity Agreement, which confirms their Capacity Market Obligation and their payments.

There are two capacity auctions each year:

T-4 – this is the main auction; it buys most of the capacity needed for delivery in four years’ time. In this auction, new build generators can secure 15-year agreements.
T-1 – these are top-up auctions just ahead of each delivery year. We generally use top-up auctions for sites which were not ready in time for that year’s T-4 auction. Most businesses will want to move into T-4 as soon as possible to take advantage of known, and higher, prices.

What we do:

Our expert Capacity Market team manages all aspects of the auction process for your assets.
We work with each site to ensure that they meet their capacity obligation by achieving Satisfactory Performance Days (SPDs)—three separate half-hour settlement periods on which capacity is ‘proved’.
Flexitricity offers access to the full range of energy market opportunities. Capacity Market participation can be stacked with other flexibility services – you don’t need to opt out of frequency response or Balancing Mechanism participation to be able to earn CM revenue.

Setting up:

Capacity Market participation is open to a wide range of assets — new and existing generators, including on-site generators such as combined heat and power engines and heat pumps, flexible load (growlights, industrial processes, HVAC, refrigeration, etc.), and energy storage.
Both fast responding asset types and those with longer ramp times can participate. However, assets which can only run for a set amount of time such as batteries receive de-rated payments to account for this.
We connect your asset(s) to our control room if needed via our outstation installed on your site or via an API. We supply our outstations without charge, and we continue to own and maintain them. We also provide communications lines, which we pay for.

We operate on a revenue share basis and we don’t charge management / upfront fees.

Free consultation and revenue illustration

We take time to get to know each site and discuss your requirements and operational parameters. One of our industry-leading team will then compile a detailed revenue illustration. Flexitricity's approach is always grounded in reality—we only promise what can be delivered.

Implementation

Our team works hand in hand with you during engineering, commissioning and testing through to go-live. We also conduct an on site technical appraisal if required

Operation & Optimisation

We discuss and agree with you the best operational strategy for your site. Our operations team and trading desk monitor your site and the energy markets 24/7 and adjust the strategy as needed to maximise revenue for your assets.

Expansion

We help you keep up to date with the latest market developments and ensure you’re aware of any new opportunities.

Our Capacity Market credentials:

Flexitricity was the first demand response provider to enter this market and has held contracts for each delivery year.
Flexitricity hold Capacity Market Agreements as far out as 2039.
Our Capacity Market team is known and respected across the industry for their expertise.
We have demonstrated that we are able to manage even the most complex projects. This includes successfully aggregating 500+ Asda supermarket fridges for Capacity Market participation. Flexitricity is one of the first providers in the world to achieve this.

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Case study

Aberdeen Heat & Power case study

Pioneering district heating project uses Capacity Market revenue to support their mission of alleviating fuel poverty.

Read content

Get in touch today

Book a call with one of our energy market specialists to find out if you can participate and how much your site could earn.

0131 221 8100