Below are the key industry contacts involved in the delivery of Electricity Market Reform.

Department for Energy Security & Net Zero

DESNZ sets the policy framework, provides sponsorship, and leads on design and legislative action.

The CfD scheme is the government’s main mechanism for supporting low-carbon electricity generation. CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high.

Further information on CfDs and Allocation Round 4 is available on the DESNZ website.

The Capacity Market ensures security of electricity supply by providing a payment for reliable sources of capacity, alongside their electricity revenues, to ensure they deliver energy when needed. This will encourage the investment needed to replace older power stations and provide backup for more intermittent and inflexible low carbon generation sources.

The Capacity Market also supports the development of more active demand management in the electricity market. Further information on Capacity Market on the DESNZ website.


Ofgem were given key roles within EMR including:

Manage and make any changes to the Capacity Market Rules through our Capacity Market Rules change process.

Manage the process for dealing with certain disputes between National Grid Electricity System Operator (NGESO) and participants in the Capacity Market (CM) and Contracts for Difference (CfD).

The Capacity Market is governed by the Electricity Capacity Regulations 2014 (the Regulations) and the Capacity Market Rules.

The Regulations provide the overarching policy and design, including the powers the Secretary of State (SoS) will hold in overseeing the Capacity Market. The Rules have been made by the SoS and provide the practical detail on how the Capacity Market will operate under the Regulations. The Rules cover:

  • Details on the contents of capacity agreements
  • Obligations of capacity agreement holders, including penalties
  • Technical operation of the Capacity Market.

EMR Delivery Body, National Grid ESO

The EMR Delivery Body, National Grid ESO, is responsible for administering key elements of the Capacity Market including:

  • Registration
  • Prequalification
  • Auction
  • Capacity Market Register
  • Agreement Management

Administering key elements of the CfD regime including:

  • Registration
  • Application and Qualification
  • Valuation ​​
  • Allocation​

They are also responsible for producing annual Electricity Capacity Reports for the Government to advise on capacity requirements in order to meet the published reliability standard.

Low Carbon Contracts Company (the CfD Counterparty) (LCCC)

The LCCC is a private company owned by DESNZ. They manage the contracts awarded to CfD Generators successful via the CfD Allocation Rounds. The management of the contracts includes during the construction, delivery phase and making CfD payments. This also involves LCCC managing the Supplier Obligation Levy that funds CfD payments, which LCCC forecast.

LCCC’s Guiding Principle is to maintain investor confidence in the CfD scheme and minimise costs to consumers. Further information is available in the LCCC Framework document.

Electricity Settlements Company (the Capacity Market Settlement Body)

ESC is responsible for carrying out the obligations to manage Capacity Market payments to Capacity Providers. This also includes holding Credit Cover for Applicants and conducting Metering Assurance.

Key to both roles is providing feedback to DESNZ and  Ofgem on the Capacity Market Rules to support them in making improvements in line with ESC Guiding Principles.

ESC’s Guiding Principle is to maintain market participants’ confidence in the Capacity Market settlement process and minimise costs to consumers. Further information is available in the ESC Framework Document.

CfD Generators

Successful CfD Generators of renewable projects enter into a private law contract with the LCCC. They are paid a flat (indexed) rate for the electricity they produce over a 15-year period; the difference between the ‘strike price’ (a price for electricity reflecting the cost of investing in a particular low carbon technology) and the ‘reference price’ (a measure of the average market price for electricity in the GB market).

Capacity Providers

Capacity Providers receive Capacity Payments for reliable sources of capacity to ensure they deliver energy when needed. Capacity Providers are required to adhere to their Capacity Market Agreement and payments are based on the Clearing Price achieved from the Auction.


Active electricity Suppliers contribute to both the CfD and Capacity Market funding arrangements.