Cross-border effects of capacity mechanisms in interconnected power systems

Pradyumna C. Bhagwat, Jörn C. Richstein, Emile J.L. Chappin, Kaveri K. Iychettira and Laurens J. De Vries

EconStor Open Access Articles and Book Chapters, 2017, vol. 46, 33-47

Abstract: The cross-border effects of a capacity market and a strategic reserve in interconnected electricity markets are modeled using an agent-based modeling methodology. Both capacity mechanisms improve the security of supply and reduce consumer costs. Our results indicate that interconnections do not affect the effectiveness of a capacity market, while a strategic reserve is affected negatively. The neighboring zone may free ride on the security of supply provided by the zone implementing a capacity mechanism. However, a capacity market causes crowding out of generators in the energy-only zone. A strategic reserve implemented by this region could aid in mitigating this risk.

Keywords: Capacity market; Cross-border effect; Strategic reserve (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/200102/1/Bhagwat_Cross%20Border.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:200102

DOI: 10.1016/j.jup.2017.03.005

Access Statistics for this article

More articles in EconStor Open Access Articles and Book Chapters from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().