By successful implementation of electricity marketization for over 20 years

the United Kingdom (UK) has begun its 3rd Electricity Market Reform including capacity market to ensure that future energy is secure

economical and low carbon. With drawing on the experience of the UK

this paper enunciates the necessity of capacity market

and analyzes the design of capacity market in four aspects including law development

operation stages

market participants and evaluation standards. Based on the first capacity market auction results in the UK

this paper lists the advantages of market design in the prolonging of capacity agreement

and its potential problems in the UK including auction design and the support of storage. This paper also states the developing ways of capacity market in the UK covering capacity interconnection and transitional arrangements. In light of comparisons among capacity markets in the UK and USA including demand

supply

market time and ancillary support

the revelation to China’s future capacity market construction is described. This work is supported by State Grid Corporation of China (No. DZN17201500036).