Capacity Market: Proposals to maintain security of supply and enable flexible capacity to decarbonise

In this consultation we are seeking views on a series of changes to the Capacity Market (CM) that aim to retain the flexible generation capacity required to maintain the security of our electricity supply in the short-term and to support the conversion of unabated gas plants to low carbon technology. Specifically, we are consulting on proposed changes that would:

• Lower the capital expenditure threshold for "refurbishing" three-year CM agreements to support the economic case for investment to extend the life of ageing plants. This is important to mitigate short-term risks to electricity security whilst we focus on scaling up low carbon flexible capacity and supporting infrastructure.
• Ensure that all substantially refurbishing or new combustion power plants participating in the 2026 T-4 CM auction have a credible plan in place to decarbonise through converting to either H2P or power CCUS before they become operational.
• Introduce an exit pathway (“managed exits”) to enable unabated gas generators to decarbonise by allowing multi-year CM agreement holders to exit and transfer to a Dispatchable Power Agreement (DPA), enabling conversion to power CCUS.

Please refer to the consultation document when answering the questions.