Electricity Market Reform (EMR) aims to deliver low carbon energy supplies whilst maintaining security of supply and minimising the cost to the consumer. EMR introduces two key mechanisms to provide incentives for the investment required in our energy infrastructure.
The Capacity Market (CM) is one of the
key policies of the EMR programme. The CM aims to ensure the future security of
our electricity supply at the lowest cost to consumers by providing
a regular retainer payment to reliable forms of capacity, in return for such
capacity being available when the system is tight.
Contracts for Difference (CfD) is one of
the key mechanisms implemented by the UK Government as part of EMR to provide
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.
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