The European Commission has approved capacity mechanisms of six member countries

The European Commission has assessed and approved the capacity mechanisms of Belgium, France, Germany, Greece, Italy and Poland. The purpose of capacity mechanisms is to ensure the security of the electricity supply. According to the European Commission, the new measures will contribute to the security of supply and, at the same time, will not interfere with competition in the Single Market. The approved mechanisms will affect more than half of EU residents.

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The capacity mechanisms can have various forms. Belgium and Germany have chosen the form of strategic reserves, which is a capacity used only in the case of an emergency. Belgium is highly dependent on its aging nuclear power plants and the related electricity imports, which involve high security of supply risks.

Germany’s energy sector is undergoing a substantial transformation including a transition to renewables which are well known for their variable and unpredictable power output. Germany is also planning a nuclear power phase-out.  All kinds of capacity providers, including consumers with demand response mechanisms, will be able to compete in Belgium and Germany for capacity payments in regular tenders.

Both Italy and Poland need to support investment in a new capacity, because investors are not willing to invest in new power plants in the current electricity market prices. In both countries, capacity contracts will be awarded by regular auctions that are open for all types of capacity providers including demand response providers. Both existing and new, local and foreign power plants can take part in the auctions.

Capacity mechanisms in France and Greece focus mainly on demand response. Consumers who reduce their consumption when it is insufficient in the network will be compensated.

All approved mechanisms are only temporary until the system flaws that cause security supply disruption are eliminated.

-tk-

Article source Europa - Official website of the European Union
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