​On 31 March 2016, The Institute for Public Policy Research (IPPR) published a report on the UK's capacity market. Titled "Incapacitated", the report concludes that the market is not working.

The capacity market was introduced in 2014 as part of the Government's Electricity Market Reform programme with the objective of ensuring that there was sufficient capacity available to meet system demand. The report states that the two capacity market auctions run to date have resulted in £2.8 billion in subsidies being awarded to power stations in exchange for them guaranteeing to generate when needed. It concludes that the scheme is "providing poor value for money for billpayers, is working against the government's decarbonisation objectives, and is too focused on large power stations at the expense of more efficient, demand side-solutions".

Its key recommendations include splitting the capacity market into separate auctions for old and new capacity, applying an emissions performance standard to all capacity in receipt of capacity payments, requiring new large-scale- gas plants to commit to using carbon capture and storage if they are to access long term capacity contracts and allowing demand response access to longer contracts.

A copy of the report can be found here.

The Government is currently consulting on changes to the capacity market. The report is clearly of the view that the changes being considered will not solve the issues arising under the current scheme.