09:25 Michael Shanks (Labour)

Good morning, everyone. It is a pleasure to serve under your chairmanship this morning, Mr Twigg, and to be back so soon in the year to talk about the capacity market. The draft instrument, which was laid before the House on 16 December 2024, seeks to make technical improvements and changes to the capacity market scheme—the Government’s main tool for ensuring security of electricity supply in Great Britain. To achieve clean power by 2030, electricity market reform is critical; to paraphrase our clean power action plan, we must reform the capacity market to provide clear and viable routes to decarbonisation for unabated gas, enable low-carbon flexible capacity and incentivise investment in existing capacity.

Since its introduction in 2014, the capacity market has contributed to investment in just under 19 GW of new, flexible capacity, which is needed to replace older, less efficient plants as we transition to a net zero economy. To date, the capacity market has been successful in ensuring that Great Britain has adequate electricity capacity to meet demand, and it continues to be required in order to maintain security of supply and provide investor confidence. To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation, based on our day-to-day experiences of operating the scheme. On that note, let me turn to the details of the draft instrument.

In conclusion, the draft instrument introduces a number of technical provisions and changes to enable the continued efficient operation of the capacity market, so that it can continue to deliver on its objectives. These reforms will be critical on our pathway to achieving clean power by 2030. They will improve security of supply and, by accelerating investment in low-carbon technologies, increase the role that those play in the capacity market. We need clear routes for the decarbonisation of unabated gas and for the rapid acceleration of low-carbon, flexible capacity, and today we make another step towards that. I commend the regulations to the Committee.

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09:32 Andrew Bowie (Conservative)

The capacity market is responsible for ensuring that the right incentives are in place to deliver during periods of electricity system shortage and stress. As we mentioned when the previous amendments were introduced in November, the previous Government identified over a decade ago that, while introducing renewable energy sources into the energy mix,

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