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Can we reconcile different capacity adequacy policies with an integrated electricity market?

Finon, Dominique (2013-09), Can we reconcile different capacity adequacy policies with an integrated electricity market?. https://basepub.dauphine.fr/handle/123456789/13152

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CEEM_Working_Paper_5-_FINON.pdf (1.317Mb)
Type
Document de travail / Working paper
Date
2013-09
Publisher
Fondation Paris Dauphine
Series title
CEEM Working Paper
Series number
2013 - 5
Published in
Paris
Pages
38
Metadata
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Author(s)
Finon, Dominique
Abstract (EN)
In the present European Union debate, many consider capacity remuneration mechanisms (CRM) as useless and, if they are eventually considered as useful, there is a necessity of total alignment of capacity adequacy policies in time. We develop an opposite position. The adoption of CRM is a necessity because the market and regulatory failures to invest in peaking units, which are amplified by the large, scale development of intermittent sources by out-of-market policies. Then, provided that some minimal harmonization is sought by regulators and TSOs, each member state should have some freedom in the adoption of his capacity adequacy policies.
Subjects / Keywords
energy market; capacity remuneration mechanisms (CRM); European Union
JEL
Q55 - Technological Innovation
Q58 - Government Policy
Q43 - Energy and the Macroeconomy

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