Ed Davey (Liberal Democrat)

A key part of the challenge our market faces is in ensuring secure electricity supplies. In addition to the closure of ageing plant and increasing demand, the UK is seeking to decarbonise its electricity supply in order to meet our carbon reduction targets. These changes create an investment challenge, for some forms of capacity such as gas generation. The Government are taking clear action to address this by legislating to introduce the capacity market. The capacity market will give investors the certainty they need to put adequate reliable capacity in place and by protecting consumers against the risk of supply shortages. It does this by providing a predictable revenue stream to providers of reliable capacity, including both generation and non-generation measures such as demand-side-response and storage. In return, they must commit to provide capacity when needed or face financial penalties.

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