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Power plant capacity auction in the United KingdomPublished: 1 of June, 2015

Recently, European electricity market models have been facing serious challenges: continuously increasing renewable electricity generation and unfavourable price conditions/negative spread resulted in collapsing profitability of fossil-based, primarily natural gas fired power plants, reducing significant part of existing capacities and postponing or cancelling new investments. The above processes have raised fears in relation to security of supply in several European countries. There are many who would treat the problem by introducing capacity mechanisms rewarding for the availability of power plant capacities.

Therefore, it is important both for European countries who are hesitating about the introduction of capacity mechanisms and the European Commission who is making efforts to establish and maintain single European energy market to learn the structure and rules of the British capacity market and the consequences that can be drawn from the outcomes of the first capacity auction held in December 2014.