Brussels sets the bar high for capacity markets

The European Commission’s ruling on the French capacity mechanism is a clear signal that schemes must be open to foreign participation to receive Brussels’ approval.

The European Commission approved France’s capacity mechanism for the electricity sector earlier this month after Paris agreed to revise the scheme with several modifications. The commission had originally launched an investigation into the scheme in November 2015 after finding it might have been incompatible with the EU’s Guidelines on State Aid for Environmental Protection and Energy. However, the revised scheme was deemed satisfactory, particularly because it allows foreign capacity providers to bid for remuneration.