Lessons from the first capacity market auction in Great Britain

The first capacity market auction covering Great Britain's electricity sector took place in December 2014, and resulted in 49.3 GW securing capacity contracts for delivery in 2018/2019 at a clearing price below most market expectations. The results have generally been hailed a success by policymakers, but the auction design is still likely to evolve as the results of the first auction are assessed against the policy objectives. With 2.6 GW of new capacity securing 15-year contracts and 6 GW of existing capacity exiting the auction, an area of particular interest may be the contract lengths available for different types of participants. At a time when Capacity Remuneration Mechanisms are being considered across Europe, the design and outcomes of Great Britain's capacity market are being analysed with great interest and can provide important lessons to policymakers across Europe.