The Low Carbon Contracts Company (LCCC) role is to oversee the settlement of the Capacity Market to ensure that regular payments are made to capacity providers who have agreed to provide capacity at times of system stress, to provide meter assurance for sites not already validated by the Balancing System Code operator and also to enable volume reallocation required for secondary trading, which is permitted between those capacity providers who have under – or over – delivered their obligation during a stress event.

Information for Capacity Providers

The below section contains information from LCCC/ESC relevant to Capacity Providers

Credit Cover Process

In order to enter the Capacity Market Auction, Applicants may need to lodge and maintain Credit Cover with the Settlement Body, Electricity Settlement Company (ESC).

More on credit cover on LCCC’s website

Obligation Trading

Also commonly referred to as “Secondary Trading”, this allows Capacity Providers to trade all or part of their Capacity Market (CM) Capacity Obligation for a Delivery Year with other eligible CM participants who meet the ‘acceptable transferee’ requirements.

More on obligation trading on LCCC’s website

Volume Reallocation

In addition to Obligation Trading, Capacity Market (CM) participants will be able to re-allocate excess capacity arising from the over-delivery of capacity during a System Stress Event, to other Capacity Market participants who have under-delivered (during a System Stress Event). This is to incentivise delivery and support the respective flow of payments. This short term trading measure is referred to as Volume Reallocation.

More on volume reallocation on LCCC’s website

Mock Stress Events

Capacity Market Stress events are designed to check that the Capacity Providers’ and Delivery Partners’ systems are working correctly. They also help to ensure that Capacity Providers are aware of their obligations during a Capacity Market Stress Event. Mock Stress Events are intended to be a ‘real world’ test for both the Capacity Providers and Delivery Partners.

More on mock stress events on LCCC’s website

Capacity Provider Activity Timeline

LCCC provide a dashboard which allows Capacity Providers to identify upcoming Capacity Market Activities and display high level information; such as the relevant CM Delivery Partner(s) and links to useful guidance, working practices and materials.

View dashboard on LCCC’s website

Useful Links