Capacity market

Power generation - energy security.

In the context of energy and power generation, a capacity market is designed to ensure security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when needed. This is designed to encourage investment to replace older power stations, and provide backup for more intermittent and inflexible low carbon generation sources.

The capacity market is also designed to support the development of more active demand management in the electricity market.

(Source - UK Government - Energy Capacity Market)

Deal winner's £395m financing supported by capacity market contracts

"Statera successfully structured and executed a greenfield portfolio financing of £395m to fund the construction of one of Europe’s largest co-located battery energy storage system (BESS) and flexible generation projects.

"Spread over two phases, the financing was supported by a number of government-backed capacity market (CM) contracts, which allow for the provision of much needed fast response generation capabilities in an increasingly volatile power market."

ACT Deals of the Year 2024: Project financing and government funding winner - Stratera

See also

• Capacity
• Contract
• Debt capacity
• Dual capacity
• Portfolio
• Project finance
• Risk capacity
• Security
• Single capacity
• Tax capacity
• Total Loss Absorbing Capacity (TLAC)
• Volatility

Other resource

• UK Government - Energy Capacity Market