IDEAS home Printed from
   My bibliography  Save this article

A critical assessment of the different approaches aimed to secure electricity generation supply


  • Batlle, C.
  • Rodilla, P.


Since the very beginning of the power systems reform process, one of the key questions posed has been whether the market, of its own accord, is able to provide satisfactory security of supply at the power generation level or if some additional regulatory mechanism needs to be introduced, and in the latter case, which is the most suitable approach to tackle the problem. This matter is undoubtedly gaining importance and it has taken a key role in the energy regulators' agendas. In this paper, we critically review and categorize the different approaches regulators can opt for to deal with the problem of guaranteeing (or at least enhancing) security of supply in a market-oriented environment. We analyze the most relevant regulatory design elements throughout an updated assessment of the broad range of international experiences, highlighting the lessons we have learned so far in a variety of contexts. Based on the analysis, we conclude by providing a set of principles and criteria that should be considered by the regulator when designing a security of supply mechanism.

Suggested Citation

  • Batlle, C. & Rodilla, P., 2010. "A critical assessment of the different approaches aimed to secure electricity generation supply," Energy Policy, Elsevier, vol. 38(11), pages 7169-7179, November.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:7169-7179

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Finon, Dominique & Meunier, Guy & Pignon, Virginie, 2008. "The social efficiency of long-term capacity reserve mechanisms," Utilities Policy, Elsevier, vol. 16(3), pages 202-214, September.
    2. Batlle, Carlos & Barroso, Luiz A. & Pérez-Arriaga, Ignacio J., 2010. "The changing role of the State in the expansion of electricity supply in Latin America," Energy Policy, Elsevier, vol. 38(11), pages 7152-7160, November.
    3. Cramton, Peter & Stoft, Steven, 2005. "A Capacity Market that Makes Sense," The Electricity Journal, Elsevier, vol. 18(7), pages 43-54.
    4. Batlle, Carlos & Vazquez, Carlos & Rivier, Michel & Perez-Arriaga, Ignacio J., 2007. "Enhancing power supply adequacy in Spain: Migrating from capacity payments to reliability options," Energy Policy, Elsevier, vol. 35(9), pages 4545-4554, September.
    5. Roques Fabien A. & Newbery David M. & Nuttall William J., 2005. "Investment Incentives and Electricity Market Design: the British Experience," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-36, June.
    6. D. Finon & V. Pignon, 2008. "Capacity mechanisms in imperfect electricity markets," Post-Print hal-00716763, HAL.
    7. David M. Newbery, 1995. "Power Markets and Market Power," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 39-66.
    8. Finon, Dominique & Pignon, Virginie, 2008. "Capacity mechanisms in imperfect electricity markets," Utilities Policy, Elsevier, vol. 16(3), pages 141-142, September.
    9. Batlle, Carlos & Solé, Carlos & Rivier, Michel, 2008. "A New Security of Supply Mechanism for the Iberian Market," The Electricity Journal, Elsevier, vol. 21(2), pages 63-73, March.
    10. Peter Cramton & Steven Stoft, 2007. "Colombia Firm Energy Market," Papers of Peter Cramton 07cfem, University of Maryland, Department of Economics - Peter Cramton, revised 2007.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Hary, Nicolas & Rious, Vincent & Saguan, Marcelo, 2016. "The electricity generation adequacy problem: Assessing dynamic effects of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 91(C), pages 113-127.
    2. Levin, Todd & Botterud, Audun, 2015. "Electricity market design for generator revenue sufficiency with increased variable generation," Energy Policy, Elsevier, vol. 87(C), pages 392-406.
    3. Grave, Katharina & Paulus, Moritz & Lindenberger, Dietmar, 2012. "A method for estimating security of electricity supply from intermittent sources: Scenarios for Germany until 203011The paper is based on a study of the Institute of Energy Economics at the University," Energy Policy, Elsevier, vol. 46(C), pages 193-202.
    4. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2018. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Working Paper Series in Production and Energy 27, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    5. Rodilla, Pablo & García-González, Javier & Baíllo, Álvaro & Cerisola, Santiago & Batlle, Carlos, 2015. "Hydro resource management, risk aversion and equilibrium in an incomplete electricity market setting," Energy Economics, Elsevier, vol. 51(C), pages 365-382.
    6. Keppler, Jan Horst, 2017. "Rationales for capacity remuneration mechanisms: Security of supply externalities and asymmetric investment incentives," Energy Policy, Elsevier, vol. 105(C), pages 562-570.
    7. Keles, Dogan & Bublitz, Andreas & Zimmermann, Florian & Genoese, Massimo & Fichtner, Wolf, 2016. "Analysis of design options for the electricity market: The German case," Applied Energy, Elsevier, vol. 183(C), pages 884-901.
    8. Azofra, D. & Martínez, E. & Jiménez, E. & Blanco, J. & Saenz-Díez, J.C., 2014. "Comparison of the influence of biomass, solar–thermal and small hydraulic power on the Spanish electricity prices by means of artificial intelligence techniques," Applied Energy, Elsevier, vol. 121(C), pages 28-37.
    9. Wierzbowski, Michal & Filipiak, Izabela, 2017. "Enhanced operational reserve as a tool for development of optimal energy mix," Energy Policy, Elsevier, vol. 102(C), pages 602-615.
    10. Newbery, David, 2016. "Missing money and missing markets: Reliability, capacity auctions and interconnectors," Energy Policy, Elsevier, vol. 94(C), pages 401-410.
    11. Azofra, D. & Martínez, E. & Jiménez, E. & Blanco, J. & Azofra, F. & Saenz-Díez, J.C., 2015. "Comparison of the influence of photovoltaic and wind power on the Spanish electricity prices by means of artificial intelligence techinques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 532-542.
    12. Gracceva, Francesco & Zeniewski, Peter, 2014. "A systemic approach to assessing energy security in a low-carbon EU energy system," Applied Energy, Elsevier, vol. 123(C), pages 335-348.
    13. repec:eee:enepol:v:116:y:2018:i:c:p:312-322 is not listed on IDEAS
    14. Olsina, Fernando & Pringles, Rolando & Larisson, Carlos & Garcés, Francisco, 2014. "Reliability payments to generation capacity in electricity markets," Energy Policy, Elsevier, vol. 73(C), pages 211-224.
    15. Rintamäki, Tuomas & Siddiqui, Afzal S. & Salo, Ahti, 2016. "How much is enough? Optimal support payments in a renewable-rich power system," Energy, Elsevier, vol. 117(P1), pages 300-313.
    16. Rodilla, P. & Batlle, C., 2012. "Security of electricity supply at the generation level: Problem analysis," Energy Policy, Elsevier, vol. 40(C), pages 177-185.
    17. Luiz T. A. Maurer & Luiz A. Barroso, 2011. "Electricity Auctions : An Overview of Efficient Practices," World Bank Publications, The World Bank, number 2346.
    18. Katrin Schmitz & Bjarne Steffen & Christoph Weber, 2013. "Incentive or impediment? The impact of capacity mechanisms on storage plants," RSCAS Working Papers 2013/46, European University Institute.
    19. Batlle, Carlos & Barroso, Luiz A. & Pérez-Arriaga, Ignacio J., 2010. "The changing role of the State in the expansion of electricity supply in Latin America," Energy Policy, Elsevier, vol. 38(11), pages 7152-7160, November.
    20. Batlle, C. & Pérez-Arriaga, I.J. & Zambrano-Barragán, P., 2012. "Regulatory design for RES-E support mechanisms: Learning curves, market structure, and burden-sharing," Energy Policy, Elsevier, vol. 41(C), pages 212-220.
    21. David Newbery and Michael Grubb, 2015. "Security of Supply, the Role of Interconnectors and Option Values : insights from the GB Capacity Auction," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    22. Moreno, Fermín & Martínez-Val, José M., 2011. "Collateral effects of renewable energies deployment in Spain: Impact on thermal power plants performance and management," Energy Policy, Elsevier, vol. 39(10), pages 6561-6574, October.
    23. David Newbery & Michael Grubb, 2014. "The Final Hurdle?: Security of supply, the Capacity Mechanism and the role of interconnectors," Cambridge Working Papers in Economics 1433, Faculty of Economics, University of Cambridge.
    24. Tapia-Ahumada, K. & Pérez-Arriaga, I.J. & Moniz, E.J., 2013. "A methodology for understanding the impacts of large-scale penetration of micro-combined heat and power," Energy Policy, Elsevier, vol. 61(C), pages 496-512.
    25. Paulus, Moritz & Grave, Katharina & Lindenberger, Dietmar, 2011. "A methodology to estimate security of supply in electricity generation: results for Germany until 2030 given a high level of intermittent electricity feed-in," EWI Working Papers 2011-10, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:7169-7179. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.