Mr. Robin McCormick:

There are three ways in which generators can get revenue in this market. Firstly, there is a capacity payment where a generator can be relied upon to be functioning when it is needed. For example, on a day when there is very little wind, large conventional generators are rewarded with a capacity payment for providing electricity. Second, they can be involved in the energy market which we describe as the integrated single electricity market, I-SEM. Third, they can also earn revenue from system services. These are the services that they can provide to help us run the system when there is much wind in the system. If the wind suddenly dies and we need to conventional generators to step up and fill the gap then we will reward the generators for being able to generate electricity more quickly that they had traditionally been able to do.

There is a range of ways of supporting the conventional generation that we need. The regulator and ourselves run a capacity auction which sets out what the forecast demand in the future is and all the generators are able to bid into that capacity auction to claim their portion of that capacity revenue.