(247) Two interested parties claimed that, compared to capacity mechanisms in neighbouring countries, such as France or the United Kingdom, the Belgian de-rating factors risk heavily penalising technologies such as storage, demand response or renewables.
(248) One interested party argued that the de-rating factors contemplated by the Belgian CRM published in the opening decision create severe market entry barriers for storage in particular and energy-limited capacity providers in general.
3.5.1.4.
Payback obligation
(249) Two interested parties claimed that the payback obligations in the capacity contracts discriminate between ‘full schedule’ and ‘non-full schedule’ Capacity Market Units and breach the ‘single strike price’ principle.
(250) According to one interested party, the mechanics of the ‘payback obligation’ discriminate against full-schedule capacity operators, as it fails to take into account these operators’ hedging activities, whereby they sell a major part of their expected volume in advance on the forward markets, exposing them to a payback of revenues that they did not earn. In contrast, non-full schedule operators have considerable flexibility effectively to declare individual market prices which act as the strike price, limiting their risk of having to pay back unearned revenues and also providing possible opportunities to avoid the payback obligation.
(251) Another party argued that the payback obligation discriminates between full schedule and non-full schedule CMUs, firstly due to the absence of exemption from the pay-back obligation for capacity that has already been sold on forward markets (and not capturing scarcity prices) and secondly due to the introduction of the ‘Declared Market Price’ for CMUs that do not submit to full schedules, in practice introducing multiple strike prices.
3.5.1.5.
Intermediate price cap
(252) One interested party expressed its concerns that the introduction of an intermediate price cap will distort competition in the auction, because some existing capacities requiring investments to remain economically profitable may not have the guarantee to recover their ‘missing-money’ and may be forced to exit the market.
(253) According to one interested party, there is a material ‘investment gap’ between the investment threshold for 3-year contracts, currently 177 EUR/kW, and the intermediate price cap, currently anticipated as being between 21-31 EUR/kW, which leads to discrimination against existing capacities requiring investments that may also have significant ‘missing-money’.
3.5.1.6.
Direct cross-border capacity
(254) Two interested parties stated that providing for the possibility of direct cross-border participation may have undue negative effects on competition and trade between Member States.
(255) According to these interested parties, direct cross-border participation may reduce incentives to invest in interconnection capacity. Furthermore, the measure may undermine market coupling, as the CRM could lead to a situation where capacity providers seek access to the most attractive market with a direct and exclusive connection. Also the measure should take into account to what extent interconnection could remedy any possible problem of generation adequacy.
3.6.
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