Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Capacity Market definition

What does Capacity Market mean? In practice, a capacity market is the framework under which generators, battery storage and demand‑side response are paid to be available at times of system stress, to support security of electricity supply and underpin investment and plant retention. In Great Britain, the Capacity Market is established by the Energy Act 2013 and detailed regulations and rules. National Grid ESO (as EMR Delivery Body) runs T‑4 and T‑1 capacity auctions. Successful bidders enter capacity agreements with availability payments and performance penalties for non‑delivery; agreement lengths vary (typically one year for existing plant and up to 15 years for new...

Great Britain Capacity Market Rules: legal framework, amendment mechanisms, 10‑year reviews, and version tracker (2014–2025)

Published by a LexisNexis Energy expert

Practice notes

What are the capacity market rules?

The Capacity Market (CM) was established by the UK government to secure dependable electricity capacity by encouraging private sector commitment and investment, thereby protecting security of supply in Great Britain (GB). After extensive consultation, the CM was brought forward using powers in the Energy Act 2013 (EA 2013). The principal instrument giving effect to the CM is the Electricity Capacity Regulations 2014 (the Capacity Regulations), SI 2014/2043, as amended.

Alongside the Capacity Regulations, SI 2014/2043:

section 34 of the EA 2013 empowers government, via the Secretary of State, to create and revise Capacity Market Rules (CM Rules) that supplement secondary legislation made for the CM
regulation 77 of the Capacity Regulations, SI 2014/2043, authorises the Gas and Electricity Markets Authority (GEMA) to make or amend CM Rules governing the CM’s operation and administration

In practice, GEMA exercises this function through the Office of Gas and Electricity Markets (Ofgem). For details on Ofgem, see Practice Note: Ofgem. In practice, this has resulted in one set of CM Rules being...

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Web page updated on 21/05/2026

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