What is the Capacity Market charge on my bill?
The Capacity Market Supplier Charge is what your supplier pays to keep generation, storage, interconnectors and demand-side response under contract to be available when the electricity system is tightest, and then recovers from you. It is unusual in the one respect that matters most: it is charged on your demand between 4pm and 7pm on working days in November, December, January and February, and on nothing else. Electricity used in any other hour of the year attracts none of it.
That is why a site can cut this charge without cutting its consumption, and why it is the one line on a business electricity bill where the hours matter more than the units.
- Per MWh of peak demand, 2025/26
- £177.38
- Derived from the two figures EMRS published for the delivery year running to 30 September 2026. No rate per MWh is published as such.
- Half hours it applies to
- 492
- Settlement periods 33 to 38 on each of the 82 working days from 1 November 2025 to 28 February 2026. Around 2.8% of the hours in a year.
- When the delivery year starts
- 1 October
- The Capacity Market runs 1 October to 30 September, so it does not turn over on 1 April with network charges and the Climate Change Levy.
Not the capacity charge on the same bill
Start here, because most invoices carry two lines with the word capacity in them and they are unrelated. Confusing them is the single most expensive misreading of this part of a bill: check a national levy against a distribution schedule and the arithmetic still balances, so nothing ever surfaces.
| Capacity Market charge | Available capacity charge | |
|---|---|---|
| What it pays for | Capacity contracted to be available to the national system at times of stress | The capacity your site has reserved on the local distribution network |
| Who sets it | Auctions run under the Capacity Market Rules, settled by the Electricity Settlements Company through EMR Settlement Limited | Your distribution network operator, in its published schedule of charges |
| How it is measured | Pounds per MWh of demand in the winter peak window | Pence per kVA per day, every day of the year, used or not |
| How to reduce it | Move load out of 4pm to 7pm on winter working days | Ask the network operator to lower an agreed capacity the site never reaches |
The second of those is the agreed capacity charge, and it belongs to distribution. This guide is about the first. Both sit inside the wider map of what is on a business electricity bill.
What it pays for, and under what instrument
The Capacity Market pays capacity to exist rather than to generate. Providers bid into auctions held four years ahead of a delivery year, the T-4, and one year ahead, the T-1. Winners hold a capacity agreement obliging them to deliver when the system operator issues a system stress event, and are paid a fixed sum per de-rated kilowatt of capacity for the term of the agreement whether or not that ever happens.
| Auction | For delivery year | Cleared at | Capacity secured | Cleared on |
|---|---|---|---|---|
| T-1 | 2026/27 | £5.00 per kW per year | 7,192.317 MW | 4 March 2026 |
| T-4 | 2029/30 | £27.10 per kW per year | 40,108.608 MW | 10 March 2026 |
The framework is statutory. The Energy Act 2013 created the mechanism, the Electricity Capacity Regulations 2014 set the operating framework, and the Capacity Market Rules, last consolidated by the Department for Energy Security and Net Zero on 27 July 2026, carry the detail of prequalification, auctions and agreements. The part that reaches your invoice sits in a separate instrument: the Electricity Capacity (Supplier Payment etc.) Regulations 2014, which oblige every electricity supplier to pay a capacity market supplier charge to the Settlement Body, and a settlement costs levy on top of it.
Why one auction price does not tell you the cost
A delivery year is not paid for by its most recent auction. Agreements awarded to new build capacity in the 2014, 2015 and 2016 T-4 auctions run for fifteen years and are uprated for inflation, so any given year carries a stack of them. Delivery year 2026/27 is being paid for by the 2014 T-4 at £19,400 per MW, the 2015 T-4 at £18,000, the 2016 T-4 at £22,500, the 2017 T-4 at £8,400, the 2019 T-3 at £6,440, the 2019 T-4 at £15,970, the 2020 T-4 at £18,000, the 2021 T-4 at £30,590 and the 2022 T-4 at £63,000, each indexed to the Consumer Prices Index, plus the T-1 agreements bought a year out. That is why a falling clearing price can sit alongside a rising bill.
The three hours it is charged on
The regulations define a period of high demand as 4pm to 7pm on any working day in November, December, January or February. Nothing outside that window is chargeable demand for this purpose, and every half hour inside it counts equally.
In settlement terms the window is settlement periods 33 to 38. Settlement period 33 opens at 4pm and settlement period 38 closes at 7pm, six half hours a day. Those four months are entirely on Greenwich Mean Time, so settlement period and clock time line up without a daylight saving correction, which is not true of every charge with a time-of-day element.
Delivery year 2025/26 contained 82 working days across those four months, once the Christmas Day, Boxing Day and New Year bank holidays are removed, so 492 chargeable half hours. That is 246 hours, or about 2.8% of the hours in a year.
How the charge is calculated
At the level of the industry, the charge is a division of one bill between suppliers. The Settlement Body works out what all the capacity agreements in the delivery year will cost, then apportions that total between suppliers in proportion to the demand each of them supplied during the periods of high demand.
What every capacity agreement running in the delivery year adds up to. Published by EMRS, and restated as the year progresses.
Demand across every supplier in the periods of high demand, in MWh. The denominator that turns a national total into a rate.
Your metered consumption between 4pm and 7pm on winter working days. Everything else you consumed is irrelevant to this line.
For delivery year 2025/26 EMRS published total annual capacity payments of £1,892,071,536.46, confirmed on 19 May 2026, against total gross demand in the periods of high demand of 10,666,580.16 MWh, dated 31 March 2026. Divide the first by the second and the effective charge is £177.383145 per MWh of peak-window demand.
Interim first, reconciled later
Both inputs move during and after the delivery year, which is why this line is invoiced every month of the delivery year and then reconciled three times over.
- End of JulyProvisional schedules→
Two months before the delivery year opens, EMRS calculates provisional monthly amounts from forecast demand. For 2025/26 the payments figure at this point was £1,924,547,185.77 against 11,764,291.69 MWh.
- March, in yearRevised schedules→
Recalculated on actual metered demand for the peak periods that have now happened. For 2025/26 the demand figure fell to 10,666,580.16 MWh, which raised the effective rate. EMRS can restate the payments figure again after that, and for 2025/26 it did so on 19 May 2026, which is why the two halves of the rate on this page carry different dates.
- January, afterFirst annual reconciliation
The delivery year is settled against final data, and the charge is trued up. Reconciliation invoices follow at 90, 160 and 295 working days.
Two things follow for a bill payer. A Capacity Market adjustment for a period you already paid for is normal rather than an error, and the interim figure is systematically wrong in a knowable direction: forecast demand has been higher than outturn in each of the last two delivery years, so the interim rate has been too low and the true-up has been a charge rather than a credit.
A worked example at the published figures
Take a half-hourly metered site drawing a steady 250 kW through the peak window. The 250 kW is an assumption and is labelled as one; every other number below is published.
- Chargeable half hours, delivery year 2025/26
- 492
- Which is, in hours
- 246
- Demand assumed across the window
- 250 kW
- Peak-window consumption
- 61,500 kWh
- Effective rate, £1,892,071,536.46 ÷ 10,666,580.16 MWh
- £177.383145 per MWh
- Capacity Market charge, 61.5 MWh at that rate
- £10,909.06
The scale of that is worth a second look. If the same site ran at 250 kW continuously all year, a further assumption, it would consume 2,190,000 kWh and the charge above would spread to 0.4981p per kWh across the year. Compared against the Climate Change Levy at 0.801p per kWh, that is a substantial line, and it was earned in under three per cent of the year.
Run the same site on the interim figures for delivery year 2026/27, which give £307.706469 per MWh, and the charge becomes £18,923.95 for exactly the same load shape.
Where it appears on your invoice
There is no standard line name. These are the forms that resolve to this charge, and the two that look like it and are not.
| Printed on the bill | What it is |
|---|---|
| Capacity Market, Capacity Market Supplier Charge, CM Charge | This charge. Expect a rate in pounds per MWh and a volume far smaller than your consumption for the period. |
| EMR, EMR Charge, Electricity Market Reform | Usually this charge, sometimes bundled with the Contracts for Difference levy. Ask which, because they are settled on completely different volumes. |
| CM Settlement Costs Levy, Settlement Costs Levy | A second, much smaller charge that funds the operating costs of the Electricity Settlements Company. Separate line, separate basis, financial year rather than delivery year. |
| Capacity Charge, Available Capacity, Supply Capacity, kVA charge | Not this charge. A distribution charge on your agreed capacity, in pence per kVA per day. |
| Non-commodity, Third Party Costs, Pass-through | A bundle. The Capacity Market is inside it and cannot be checked separately until the supplier provides the breakdown. |
One structural clue is more reliable than any name. This charge is billed against a volume that is a small fraction of the consumption on the rest of the invoice. Where a supplier bills it against actual peak volume, a bill covering March to October carries none of it, because that period contains no periods of high demand. Where a supplier recovers it as an annualised pass-through, or apportions it from an estimated profile, it is spread across all twelve months instead. So the absence tells you which of the two you are on; its presence in July is not by itself an error.
How to check it, and what goes wrong
Checking this line means reconstructing it, and reconstruction needs half-hourly data. Four checks, in the order that makes a failure interpretable.
- The volume is the peak window, not the bill. Sum your metered kWh for settlement periods 33 to 38 on working days only. If the quantity on the line is close to your consumption for the period, the charge has been applied to everything, which overstates it by more than an order of magnitude.
- The rate belongs to the right delivery year. Delivery years run 1 October to 30 September. A bill spanning that boundary spans two rates. The 2026/27 interim basis is 73% above the revised 2025/26 rate, and 88% above the interim 2025/26 rate it is properly comparable with, so applying one year rate to the other is a large error either way.
- Interim or reconciled. An interim charge is provisional by construction. Knowing which determination a supplier used tells you whether a true-up is still coming and roughly how large.
- The exemption, if you hold one. The Capacity Market is one of the four schemes an Energy Intensive Industries certificate exempts, at the proportion certified for that meter. A certificate applied at 100%, or not applied at all, is wrong in both directions.
The most common failure we see is the first one, and it is invisible without the meter data: the invoice is internally consistent, the rate is credible, and only the volume is wrong.
What is changing
Delivery year 2026/27 opens on 1 October 2026, and on the figures published so far it is a step change.
- Total annual capacity payments, 2026/27, at 31 July 2026
- £3,474,489,734.79
- Total gross demand in the peak periods, at 31 July 2026
- 11,291,571.95 MWh
- Implied effective rate
- £307.706469 per MWh
- Against the same calculation for 2025/26
- £177.383145 per MWh
- Increase
- 73%
Both of those are the end-of-July provisional figures and the demand side has fallen at the March revision in each of the last two years, which would push the rate higher still rather than lower. Treat £307.71 as a floor for planning rather than a forecast.
The settlement costs levy is rising too
The smaller companion line, which funds the Electricity Settlements Company, was set at £7,734,000 for the financial year to 31 March 2026 and £9,112,000 for the year to 31 March 2027, an increase of 18%. It is spread across all suppliers by demand, so it remains a fraction of a penny per MWh.
Auction prices are falling while the charge rises
The T-1 auction for 2026/27 cleared at £5.00 per kW per year on 4 March 2026 and the T-4 for 2029/30 at £27.10 per kW per year on 10 March 2026, both low by recent standards. Neither materially reduces what is being recovered in the next two delivery years, because the cost is dominated by long agreements bought when prices were high. A cheap auction takes years to reach a bill.
Deep dives and edge cases
The main path covers the charge as most half-hourly sites meet it. These come up often enough to answer and not often enough to interrupt it.
A site with no half-hourly dataWhy a smaller site cannot check this line the way a larger one can.＋
Liability does not depend on metering. Any supplier supplying premises in Great Britain during the November to February period pays the charge, and recovers it from every customer supplied in that period.
What changes is verifiability. With no record of what the site drew between 4pm and 7pm, the supplier apportions the cost from an estimate of the profile. The estimate may be reasonable and it cannot be checked against anything, so for a non-half-hourly site this line is a matter of trust rather than arithmetic.
Moving load out of the windowWhat the saving is worth, and what it is not worth.＋
The saving is exactly proportional. Halving peak-window demand halves this charge, with no threshold and no top three to guess at. The same shift usually reduces red-band distribution charges and the transmission locational charge at the same time, because all three are levied across the same late afternoon of the same working day. The windows are not identical, though, and assuming they are will cost you: the red band is a year-round weekday window that counts bank holidays as weekdays, where this charge takes November to February only and drops the bank holidays, and the triad is three half hours nobody can identify in advance.
What it does not do is reduce your capacity charge, your Climate Change Levy or any per-unit levy. Those are settled on total consumption or on agreed capacity, and a load shift moves neither.
Bills that straddle 30 SeptemberOne invoice, two delivery years, two rates.＋
The delivery year boundary is 1 October, which no billing cycle respects. A bill covering it should price peak half hours before the boundary at the old delivery year rate and those after it at the new one.
In practice the risk is low, because September and October contain no periods of high demand at all. The boundary only bites on a long or corrected bill reaching back into the previous February.
What the exemption actually removesThe certified proportion, meter by meter, and never the whole thing.＋
The GB Capacity Market is one of four schemes an Energy Intensive Industries certificate exempts, alongside Contracts for Difference, the Renewables Obligation and the Feed-in Tariff. The relief is applied at the proportion on the certificate for that individual meter, so a meter certified at 85.3% still pays 14.7% of this charge.
It also has a second-order effect on everyone else. Exempt volume is taken out of chargeable demand, so the same total cost is recovered from a smaller denominator and the effective rate for unexempt consumers is higher than the published gross figures suggest. The mechanics of the certificate are covered in the EII exemption guide.
Questions
What is the Capacity Market charge on my electricity bill?＋
It is the Capacity Market Supplier Charge: the cost of paying generators, storage, interconnectors and demand-side response to be available when the system is tightest. Suppliers pay it to the Settlement Body under regulation 6 of the Electricity Capacity (Supplier Payment etc.) Regulations 2014, in proportion to their share of demand during the periods of high demand, and recover it from customers. It is not a charge on your annual consumption.
Which hours does the Capacity Market charge apply to?＋
Only to 4pm to 7pm on working days in November, December, January and February. That is the statutory definition of a period of high demand, and in settlement terms it is settlement periods 33 to 38. Delivery year 2025/26 contained 82 such working days, so 492 half hours, which is about 2.8% of the hours in a year. Consumption in every other hour attracts no Capacity Market charge at all.
What is the Capacity Market rate per MWh?＋
There is no published rate. EMRS publishes two figures per delivery year and the effective rate is their quotient. For delivery year 2025/26, total annual capacity payments of £1,892,071,536.46 confirmed on 19 May 2026, divided by total gross demand in the periods of high demand of 10,666,580.16 MWh dated 31 March 2026, gives £177.38 per MWh of peak-window demand. For 2026/27 the same arithmetic on the 31 July 2026 figures gives £307.71 per MWh.
Is the Capacity Market charge the same as my capacity charge?＋
No, and they are the two most confused lines on a business electricity bill. Your capacity charge, also called available capacity or supply capacity, is a distribution charge levied per kVA per day on the capacity your site has agreed with its distribution network operator. The Capacity Market charge is a national levy per MWh of demand in winter peak half hours. Different bodies set them, they use different units, and reducing one does nothing to the other.
Why did my Capacity Market charge go up when auction prices fell?＋
Because the charge recovers every capacity agreement being delivered in that year, not the newest auction price. Agreements from the 2014, 2015 and 2016 T-4 auctions run for fifteen years and are uprated for inflation, so a delivery year carries a stack of old agreements alongside the new ones. The T-1 auction for 2026/27 cleared at £5.00 per kW per year, yet the interim figures for that delivery year imply £307.71 per MWh, up 73% on the revised 2025/26 rate and 88% on the interim one it is properly comparable with.
Can I reduce my Capacity Market charge?＋
Yes, and it is one of the few levies you can. Because it is charged only on demand between 4pm and 7pm on winter working days, moving load out of that window reduces the charge without reducing total consumption. The saving is proportional: halving peak-window demand halves the charge. Nothing you do in any other hour of the year affects it.
Why am I being billed for a Capacity Market period I already paid for?＋
Because the charge is settled in stages. EMRS calculates provisional supplier schedules at the end of July before the delivery year starts, revises them in March during the year using actual metered data, and completes the first annual reconciliation in January after the year ends. Reconciliation invoices are issued at 90, 160 and 295 working days. A Capacity Market adjustment on a current invoice for an earlier period is normal.
Does an EII certificate remove the Capacity Market charge?＋
It removes the certified proportion of it. The GB Capacity Market is one of the four schemes an Energy Intensive Industries certificate exempts, alongside Contracts for Difference, the Renewables Obligation and the Feed-in Tariff. The exemption is applied meter by meter at the proportion on the certificate, so a meter certified at 85.3% still pays 14.7% of the charge.
Does the Capacity Market charge apply to a non-half-hourly site?＋
Yes. Every supplier that supplies premises in Great Britain during the November to February period is liable, whatever the metering. Without half-hourly data there is no record of what the site consumed between 4pm and 7pm, so the supplier apportions the cost using an estimate. That estimate cannot be verified against meter data, which is the practical reason a smaller site cannot check this line the way a half-hourly site can.
What is the CM settlement costs levy, and is it the same charge?＋
No, it is a second and much smaller line. The settlement costs levy funds the operating costs of the Electricity Settlements Company under regulation 9 of the same regulations, and it runs on a financial year rather than a delivery year. It was £7,734,000 for the year to 31 March 2026 and £9,112,000 for the year to 31 March 2027, spread across all suppliers, so it works out at a fraction of a penny per MWh.
Why can a Capacity Market line not be checked exactly?＋
Because the denominator changed. Up to delivery year 2023/24 suppliers were apportioned on gross demand, which EMRS publishes, so the derived rate was exact. From delivery year 2024/25 the apportionment uses chargeable demand, which is gross demand adjusted for transmission losses and with EII exempt volume removed, and EMRS does not publish that figure. A rate derived from published gross demand is therefore a close proxy rather than the real one.
Which auctions is the current charge paying for?＋
For delivery year 2025/26 the most recent four year ahead auction in the stack is the 2021 T-4, which cleared at £30,590 per MW and is uprated to £38,069.51 per MW for that delivery year. For 2026/27 it is the 2022 T-4 at £63,000 per MW, uprated to £76,291.37 per MW. Alongside those sit agreements from the 2014, 2015, 2016, 2017, 2019 and 2020 auctions, plus one year ahead T-1 agreements.
The peak half hours, summed and priced.
Simplest Energy rebuilds the Capacity Market line from your own half-hourly demand in the delivery year peak periods, then compares it against what you were billed.
- Peak-window consumption summed from half-hourly data for settlement periods 33 to 38 on working days from November to February
- Priced at the rate derived from the EMRS determination for that delivery year, interim or reconciled
- Held provisional, with the reason shown, where the delivery year rate rests on the gross-demand proxy
- Apportioning the charge for a site with no half-hourly data covering the peak window
- The delivery year 2024/25 determinations, which are published and not yet loaded
- The delivery year 2026/27 determinations, published on 31 July 2026, which the delivery year opening on 1 October 2026 will need
Built from the primary document.
The Electricity Capacity (Supplier Payment etc.) Regulations 2014
Key Figures for Payments in 2025/26, latest figure confirmed 19 May 2026
Key Figures for Payment 2026/27, figures confirmed 31 July 2026
G15, Capacity Market Supplier Payments, version 11.0, 15 July 2025
Capacity Cleared Price adjusted for UK Consumer Prices Index, historical data
T-1 Auction Monitor Report, delivery year 2026/27, 6 March 2026
T-4 Auction Monitor Report, delivery year 2029/30, 12 March 2026
Capacity Market Rules, informal consolidation, 27 July 2026
- Last reviewed
- 2 September 2026
- Technical basis
- EMRS Key Figures for Payments 2025/26 and 2026/27, which are dated per figure rather than by revision, EMRS guidance G15 v11.0 of 15 July 2025, and the Electricity Capacity (Supplier Payment etc.) Regulations 2014, all checked 2 September 2026
- Review trigger
- A new EMRS determination for a delivery year, the start of delivery year 2026/27 on 1 October 2026, or the January reconciliation that follows a delivery year ending.
This guide explains how the Capacity Market Supplier Charge is set and calculated. It is not tax, legal or procurement advice. The figures are the determinations published for delivery years 2025/26 and 2026/27 at the date of review, and both are restated during and after the delivery year, so check the linked source before relying on one.