The European Court of Justice (ECJ) has ruled out the European Commission's decision not to raise objections to the support scheme establishing a capacity market in the United Kingdom (UK). It has estimated that the approval of the UK capacity market was not based on a thorough assessment and investigation process. Therefore, the capacity market is suspended until further notice: the UK government will not be able to issue capacity market payments to energy companies or hold auctions, which includes the upcoming auctions scheduled to take place in January and February 2019 and aimed to secure additional power capacity for the winter of 2019-2020 and 2022-2023.
The European Commission approved the scheme in June 2014 on grounds that it was compatible with the EU State aid rules. It was established by the UK government in order to guarantee security of supply since the available power was at risk of being insufficient in the near future for the purposes of satisfying peak-demand periods. Through the establishment of a capacity market, the UK intended to remunerate capacity providers that commit to provide power, reduce or delay their electricity consumption during times of system stress.
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