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Capacity Market Act – introduction of a supplementary auction mechanism

by Przemysław Rogiński and Julia Pieczonka

13 February 2025

The Act of 24 January 2025 amending the Capacity Market Act entered into force on 13 February 2025.

The statute introduces the possibility of holding supplementary auctions in the capacity market for supply periods from the second half of 2025 to 2028 and the extension of support for energy sources that do not meet EU emission standards.

Capacity Market Act – what is going to change?

The amendment will introduce supplementary auctions under the current capacity mechanism for the periods: the second half of 2025 (semi-annual auction) and 2026, 2027 and 2028 (annual auctions). Supplementary auctions will be held:

following the completion of additional auctions for a given year of capacity market supplies, and
where the amount of capacity offered in the main auction and in the additional auctions for a given year of supply is insufficient – to address the sufficiency problem for a given supply period.

According to the EU laws, from mid-2025, generation capacities emitting more than 550 kg CO₂/MWh will lose the right to state aid in the form of the capacity market. Consequently, they "shall not be committed or receive payments or commitments for future payments under a capacity mechanism" ¹.

However, such a limitation may result in a failure to cover all the power demand to ensure the security of supply. The supplementary auction mechanism is designed to counter this risk.

The law allows generation capacities emitting more than 550 kg CO₂/MWh to participate in the supplementary auctions and compete with those meeting the emission limit. Support in the form of supplementary auctions is possible under the EMD Regulation².

The EMD Regulation provides for the possibility of a temporary and conditional extension of support, depending on the granting of a derogation by the European Commission. Power contracts concluded under supplementary auctions are not enforceable until the indicated derogation is granted.

If you have any questions about capacity market auctions, please contact our experts.

¹ Regulation (EU) 2019/943 of the European Parliament and of the Council on the internal market for electricity, Article 22(4)(b).

² Regulation (EU) 2024/1747 of the European Parliament and of the Council of 13 June 2024 amending Regulations (EU) 2019/942 and (EU) 2019/943 as regards improving the Union’s electricity market design.

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Przemysław Rogiński

Attorney at law (Poland)

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