Britain to hold first power capacity market auction Dec. 16

Britain will hold its first auction for standby power capacity on Dec. 16, a model that will serve as a blueprint for other European countries planning to operate capacity markets that reward operators for holding power generation in back-up mode. The mechanism is designed to tap additional electricity production at times of high demand when renewable energy sources such as wind farms and solar panels are not operating. Capacity markets have split the opinions of European Union energy ministers, but France and Germany are now also considering setting up such frameworks to complement growing renewable energy production. Europe's utilities are largely in favour of capacity markets because guaranteed payments will help generators make profits on essentially loss-making thermal power plants.

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