Interaction effects of market failure and CRMs in interconnected electricity markets

Stefan Lorenczik

Energy Policy, 2019, vol. 135, issue C

Abstract: European electricity markets are characterised by a multitude of (mainly national) approaches for ensuring security of supply. Although concerns regarding possible interaction effects between different market designs have been raised occasionally, the scientific research on capacity remuneration mechanisms (CRMs) primarily focusses on different design options in single markets. The research concerning possible spsill-over effects, positive or negative, in adjacent markets is lagging behind. This is the case for the effects of CRMs as well as for the effects of insufficient investment incentives. We address both topics in this paper.

Keywords: Electricity market design; Capacity remuneration mechanisms; Cross-border effects (search for similar items in EconPapers)
JEL-codes: D41 D47 Q40 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:135:y:2019:i:c:s0301421519305488

DOI: 10.1016/j.enpol.2019.110961

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