UK capacity market faces legal challenge

The UK government’s capacity market mechanism has been challenged in court on the basis that it gives an illegal subsidy to fossil fuel generation over demand side options.

Tempus Energy, which specialises in demand management, submitted a challenge to the European General Court on Thursday over the European Commission's decision to grant the UK capacity market scheme state aid approval.

It argues that the contract lengths are discriminatory and cost is spread unfairly among suppliers and customers. It also says the imposition of up-front deposits that entrants have to pay and exclusivity clauses cause discrimination.