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Press release: 24 October 2019
The European Commission has today approved the British Capacity Market – worth as much as £24 billion in subsidies levied on electricity consumers. Introduced in 2014, the scheme has been suspended since 2018, following a ruling by the EU’s General Court in a case brought by Tempus Energy.
Tempus Energy had argued the Capacity Market was designed to keep fossil fuels thriving and fostered barriers to entry for smaller, cleaner suppliers and more innovative technologies. The reapproved scheme contains some tweaks – but according to energy lawyers, they fail to address the fundamental issue that the scheme is unnecessary and harmful.
Sam Bright, energy lawyer at ClientEarth, said: “The litigation brought by Tempus gave the UK Government and the European Commission breathing space to reconsider whether a scheme of this nature was really necessary. Sadly, rather than take this opportunity for a major rethink, which could have brought the British electricity market into the 21st century, the Commission is allowing the government to keep pumping electricity consumers’ money into 20th century infrastructure.
“The version of the Capacity Market approved today has been amended to improve its environmental credentials, presumably in response to the legal case. But these improvements appear little more than window dressing, and fail to tackle the underlying issue – namely, that a Capacity Market of this kind that provides huge subsidies to existing coal and new and existing gas plants is totally unnecessary and inappropriate.
“Boris Johnson has said he wants us to be ‘the cleanest, greenest society on earth’ – but presides over an energy policy that fails to show similar ambition. Expert analysis clearly shows that this huge payout to fossil fuel electricity companies is unnecessary and actively harming the UK’s efforts to transition to a net-zero economy. It is high time for politicians to stop putting consumers’ money into fossil fuels, and allow the clean energy sector to thrive.”
Read ClientEarth’s comment piece “The UK Capacity Market is not fit for purpose”, published as the UK consulted on its Capacity Market after the Tempus court win.
ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.