Revenue guarantees for power plants in new market reforms
NEW POWER plants will be able to receive revenue guarantees for up to 15 years, under new market reforms confirmed by the government yesterday.
The capacity market rules aim to ensure that there is sufficient energy supply in place to meet demand by securing agreements between energy providers and suppliers. These agreements will be up to 15 years for new capacity, up to three years for a plant that needs refurbishment and up to one year for existing providers.
This will be done through a competitive auction process with a cap at £75 per kilowatt, to keep costs down for consumers.
The aim is to drive new investment and reduce price volatility in the energy sector.