Capacity Market: Proposed changes for Prequalification 2026
This consultation is open for responses
Respond to this consultationSummary
DESNZ proposes changes to Capacity Market prequalification rules for the 2026 auction, aiming to align the scheme with decarbonisation goals and improve functionality. The consultation covers reforms to existing market rules that determine which capacity providers can participate and under what terms. Specific changes are not detailed in the summary provided.
Why it matters
This signals potential tightening of participation rules to exclude high-carbon capacity or favour low-carbon alternatives, which would shift costs from carbon-intensive incumbents to cleaner entrants. The lack of specific proposals in the summary suggests substantive changes are being considered that could reshape the capacity mix.
Key facts
- •Consultation published 2025-10-02
- •Changes target 2026 prequalification round
- •Capacity Market operational since 2014
Areas affected
Related programmes
Memo
The Capacity Market is at the heart of the government’s strategy for ensuring security of electricity supply in Great Britain. It was first introduced in 2014 as part of the Electricity Market Reform programme to support investment in capacity and deliver value for money for consumers. Existing and new build electricity capacity providers compete to obtain Capacity Market Agreements under which they commit to deliver capacity when needed, in return for guaranteed regular payments. The proposals in this consultation aim to reform the Capacity Market to ensure continued security of supply, align the scheme with the government’s decarbonisation goals, and improve the functionality of the scheme.