Electricity Market Reform

The UK faces very rapid closure of existing capacity as older, more polluting plants go offline, whilst UK electricity demand is expected to grow with our economy and as heat and transport systems are increasingly electrified.

Attracting the investment to transform the UK’s electricity infrastructure will stimulate the economy, support the growth of UK supply chains and boost the jobs market. We will need a substantial increase in skilled professionals to design, plan, manufacture, construct and operate the projects across the UK.

Electricity Market Reform (EMR) introduces two key mechanisms to provide incentives for the investment required in our energy infrastructure.

Contracts for Difference (CFD) provides long-term price stabilisation to low carbon plant, allowing investment to come forward at a lower cost of capital and therefore at a lower cost to consumers.

The Capacity Market provides a regular retainer payment to reliable forms of capacity (both demand and supply side), in return for such capacity being available when the system is tight.

Click here to visit Gov.uk and find out more.

Written on 3rd September 2015Elin Pheasant
Published in News