Coal was once the dominant fuel in power generation but the UK recently had its first week without it and it is set to be eliminated entirely from the generation mix by 2025. The first rounds of auctions under the UK capacity market led to significant wins for small scale diesel generators. In response the Government introduced a minimum tender size which weighted the system in favour of carbon heavy fossil fuel generators. Tempus Energy successfully challenged the European Commission’s state aid clearance on the grounds that it worked against European energy policy and carbon reduction targets. As a result, the scheme has been suspended and the market is currently clouded in uncertainty pending a detailed investigation by the European Commission which could take up to 18 months. How far can market design innovations go to resolve this situation? How can low carbon alternatives be incentivised so that any state aid meets European policy objectives? What lessons can be learnt beyond the UK?
Speaker: Sara Bell,
Chief Executive Officer, Tempus Energy
Respondent: Paul Dawson,
Head of Regulatory Affairs, RWE
For more information on the Beesley Lecture Series 2019, click here