The goal in implementing a capacity mechanism in France is to guarantee security of supply over the medium term by covering risks during peak demand periods in winter. It was approved with conditions by the European Commission on 8 November 2016, and the market rules drafted for it were approved by the French Ministry of Energy and the Energy Regulatory Commission on 29 November 2016.
The functioning of the capacity mechanism rests on two pillars. First, it creates a requirement for obligated parties – mostly electricity suppliers – to obtain capacity certificates to contribute to the security of supply of their customers. Holding suppliers responsible in this way is notably a means of containing peak demand growth by creating an economic incentive to limit their customers’ consumption.
Second, RTE certifies the capacity of operators that agree to make their capacity available when demand peaks in winter. The capacity mechanism allows them to realize value on the availability of generation and Mechanism by which consumers cancel or postpone all or part of their power consumption in response to a signal capacity by selling capacity certificates.