Capacity Market Changes were brought in by Ofgem on 1st October 2017 which will affect your bill considerably if you have a half-hourly meter.
Here’s a brief guide to understanding more about this charge and why it’s been introduced.
What is Capacity Market (CM)?
The goal of the CM is to make sure that there’s enough capacity on the grid to meet demand during peak periods.
The CM supplier charge is a monthly payment to EMR settlement Limited based on each supplier’s expected market share during periods of high demand.
The high demand periods are 4pm-7pm, Monday to Friday, from November to February)
Once EMR Settlement Limited knows how much each supplier has supplied (known as the outturn), it reconciles the charges. This cost is then passed on to customers via the bill. The amount each customer pays is determined by their usage during the peak periods. This encourages customers to avoid peak period usage.
So in simple terms, the less energy you use between the high demand periods above, the better and cheaper your energy bill is going to be. Especially as the CM charge is due to increase in the coming years.
You can find out more about Capacity Market Changes and details on Ofgem’s website. https://www.ofgem.gov.uk/electricity/wholesale-market/market-efficiency-review-and-reform/electricity-market-reform/capacity-market-cm-rules