UK outlines electricity capacity market reforms, incentivising clean suppliers

LONDON (Reuters) - Britain announced new proposals on Monday aimed at avoiding electricity blackouts and incentivising greater investment in low carbon technologies.

The so-called capacity market ensures there is reliable electricity supply to meet peaks in demand, safeguarding against the possibility of blackouts if intermittent sources such as those dependent on weather, are not generating enough.

Security of energy supply has become a more urgent political issue in light of threats to long-term gas supplies across Europe following Russia's invasion of Ukraine.

Launching a public consultation on its capacity market proposals, the government said it wanted to introduce new contracts to incentivise cleaner technologies to take part, and also set new timelines for oil and gas producers to reduce emissions for newly-built plants from 2034.

"As we move towards cleaner and cheaper energy, it is essential that the UK provides secure and affordable energy for all," Minister for Energy and Climate Graham Stuart said in a statement.

"The plans set out today will deliver this reliable energy and ensure the scheme that sits at the heart of Britain’s energy security is fit for the future."

Addressing industry concerns, the government is proposing multi-year contracts for low carbon flexible capacity.

(Reporting by William James and Farouq Suleiman, Editing by Kylie MacLellan)