Question

To ask the Secretary of State for Energy and Climate Change, what assumptions underly the change set out in his Department's Impact Assessment for the Capacity Mechanism of June 2014 on the forecast capacity price moves from £18/mWh in 2021 to £36.mWh in 2022.

The June 2014 Capacity Market Impact Assessment estimates the clearing price will be £18/kW for 2021 and £36/kW for 2022. Please note that the estimated clearing prices are sensitive to small changes in assumptions.

With the modelling, we have not undertaken work to isolate the impact of a change in a specific assumption to a change in clearing prices. However, we have undertaken sensitivity analysis in the Impact Assessment, as seen on page 28. Annex G of the June 2014 Capacity Market Impact Assessment outlines the modelling approach and assumptions. Please see the link below:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/324430/Final_Capacity_Market_Impact_Assessment.pdf