Capacity market design in the united kingdom and revelation to China's electricity Market reform

By successful implementation of electricity marketization for over 20 years, the United Kingdom (UK) has begun its 3rd Electricity Market Reform including capacity market to ensure that future energy is secure, economical and low carbon. With drawing on the experience of the UK, this paper enunciates the necessity of capacity market, and analyzes the design of capacity market in four aspects including law development, operation stages, market participants and evaluation standards. Based on the first capacity market auction results in the UK, this paper lists the advantages of market design in the prolonging of capacity agreement, and its potential problems in the UK including auction design and the support of storage. This paper also states the developing ways of capacity market in the UK covering capacity interconnection and transitional arrangements. In light of comparisons among capacity markets in the UK and USA including demand, supply, market time and ancillary support, the revelation to China's future capacity market construction is described.