Business and energy secretary Greg Clark has lowered the procurement target for the upcoming year-ahead (T-1) capacity market auction.
The auction was due to take place towards the start of 2018 but was cancelled in November after the capacity market was put on standstill due to an EU court ruling. Shortly afterwards the government announced plans to hold a replacement T-1 auction over the coming summer.
The procurement target for the auction for delivery in 2019/20 was set at 4.6GW in July last year. However, Clark has now written to the electricity system operator at National Grid to lower the target to just 2.7GW.
According to the letter, the decision reflects multiple changes, including to the volume of capacity which remains operational but has opted out of the auction and the volume of new build generation that has been commissioned early but has not prequalified.
The European Commission is currently conducting an in-depth investigation into the capacity market to establish whether the scheme is compliant with state aid rules. A final decision on whether to reapprove the mechanism is not expected before October and so the government is separately seeking one-off consent for the T-1 auction so it can be held earlier.