Different Approaches to Supply Adequacy in Electricity Markets
AbstractThis paper studies the electricity market design long run problem of ensuring enough generation capacity to meet future demand (resource adequacy). Reform processes worldwide have shown that it is difficult for the market alone to provide incentives to attract enough investment in capacity reserves due to technical and institutional features. We study several measures that have been proposed internationally to cope with this problem including strategic reserves, capacity payments, capacity requirements, and call options. The analytical and practical strengths and weaknesses of each approach are discussed .
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 21944.
Date of creation: 19 Dec 2006
Date of revision:
Supply adequacy; electricity markets;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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