PARLIAMENTARY WRITTEN QUESTION
Gas Fired Power Stations (26 May 2016)

To ask the Secretary of State for Energy and Climate Change, what analysis her Department has undertaken on the effect of limiting the role which diesel generators play in the Capacity Market on increased contract awards for new gas power stations.

Asked by:
Jonathan Reynolds (Labour)

The Capacity Market is designed to be technology neutral and allows all types of capacity to participate provided it complies with relevant legislation. The result is the generation mix most able to do this at the lowest possible clearing price.

Defra will consult on proposals to control emissions from small generators ahead of the next capacity market auction – this will send clear signal regarding the long-term viability of investing in generation that may be leading to localised pollution.

Ofgem is carrying out a review of ‘embedded benefits’ to determine whether these over-reward small generators. If so, Ofgem will take steps to correct this, which would reduce the competitiveness of diesel generators in the capacity market.

Answered by:
Andrea Leadsom (Conservative)
6 June 2016