Market design for generation adequacy: Healing causes rather than symptoms
Fabien Roques ()
Utilities Policy, 2008, vol. 16, issue 3, 171-183
This paper argues that electricity market reform - particularly the need for complementary mechanisms to remunerate capacity - need to be analysed in the light of the local regulatory and institutional environment. If there is a lack of investment, the priority should be to identify the roots of the problem. The lack of demand-side response, short-term reliability management procedures and non-market ancillary services provision often undermine market reflective scarcity pricing and distort long-term investment incentives. The introduction of a capacity mechanism should come as an optional supplement to wholesale and ancillary markets improvements. Priority reforms should focus on encouraging demand-side responsiveness and reducing scarcity price distortions introduced by balancing and congestion management through better dialog between network engineers and market operators.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Market Design for Generation Adequacy: Healing Causes rather than Symptoms (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:16:y:2008:i:3:p:171-183
Access Statistics for this article
Utilities Policy is currently edited by D. Smith
More articles in Utilities Policy from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().