Question

To ask the Secretary of State for Energy and Climate Change, what proportion of energy costs paid by the consumer will be attributable to the capacity market in each year between 2016 and 2026.

The Government published its latest Impact Assessment on the Capacity Market in June 20141. This shows that the impact of the capacity market is estimated to be an increase in the average annual domestic electricity bill of £2 (or 0.3%) over the period 2016-2030 (in 2012 prices). In percentage terms, the impacts on non-domestic bills are of similar magnitude. The impacts on electricity bills for individual years are uncertain but Table 7 of the Impact Assessment sets out the impact for each five-year period from 2011 to 2030.

We will shortly be publishing updated Capacity Market analysis, including revised household bill impacts, to take account of my rt. hon. Friend the Secretary of State’s decision on the amount of capacity to procure in the first delivery year (2018/19). We do not expect this change to have a material impact on the costs to consumers.

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