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Interaction effects of market failure and CRMs in interconnected electricity markets

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  • Lorenczik, Stefan

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.

Suggested Citation

  • Lorenczik, Stefan, 2019. "Interaction effects of market failure and CRMs in interconnected electricity markets," Energy Policy, Elsevier, vol. 135(C).
    • Handle: RePEc:eee:enepol:v:135:y:2019:i:c:s0301421519305488
    DOI: 10.1016/j.enpol.2019.110961
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    References listed on IDEAS

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    More about this item

    Keywords

    Electricity market design; Capacity remuneration mechanisms; Cross-border effects;
    All these keywords.

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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