Electricity Storage Network response to Capacity Market winter consultation

ESN recommends maintaining technology neutrality in the Capacity Market. In our latest response, ESN opposes the introduction of a new higher capital expenditure threshold to unlock a higher price cap in the Capacity Market. A higher cap risks sidelining cheaper, low carbon solutions that could deliver the same outcomes more efficiently, increasing costs for consumers. There is no evidence that only higher-cost technologies can meet system needs, or that these cannot be delivered within the existing price cap.

Our response also calls for DESNZ to reassess the need for new build capacity. Recent Capacity Market registers show a high volume of refurbished Combined Cycle Gas Turbine (CCGT) projects qualifying for multi-year agreements, potentially securing more than 15 GW of capacity from 2029. If existing sites can provide enduring, dispatchable capacity within the current framework, this raises serious questions about the case for additional support mechanisms aimed at new-build gas generation.

Finally, ESN raises concerns about proposals affecting Long Duration Electricity Storage (LDES) projects receiving cap and floor support. Retrospective changes to the Capacity Market could undermine investor confidence in LDES and slow delivery, at a time when rapid deployment is needed to meet Clean Power 2030 goals. Our response opposes forcing LDES projects to price-taker status in the Capacity Market and recommends retaining the option to submit a price maker memorandum. Our response recommends that access to multi-year agreements should be preserved for LDES cap and floor projects.