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Reliability standards and generation adequacy assessments for interconnected electricity systems

Author

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  • Nicolas Astier

    (Precourt Institute for energy, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UGent - Universiteit Gent = Ghent University = Université de Gand)

  • Marten Ovaere

    (UGent - Universiteit Gent = Ghent University = Université de Gand, Yale University [New Haven])

Abstract

This paper studies the consistency between two contradictory policies in the electricity industry. On the one hand, electricity systems are increasingly interconnected. On the other hand, reliability standards, whose value was typically set when countries were hardly interconnected, are still enforced at the national level. We show that enforcing autarky reliability standards may still reach the welfare optimum in the presence of interconnections, but only under two conditions. First, installed generation capacities should be determined jointly, while considering the whole power system. Second, reliability calculations should fully internalize external adequacy benefits occurring in neighboring systems. We run a numerical application for a set of European countries and find that existing interconnections may lead to generation adequacy benefits of around one billion euros per year, by enabling a 18.9 GW decrease in generation capacity. In our case study, regional coordination is found to be more important than fully internalizing external reliability benefits in adequacy simulations.

Suggested Citation

  • Nicolas Astier & Marten Ovaere, 2022. "Reliability standards and generation adequacy assessments for interconnected electricity systems," PSE-Ecole d'économie de Paris (Postprint) halshs-03756842, HAL.
    • Handle: RePEc:hal:pseptp:halshs-03756842
    DOI: 10.1016/j.enpol.2022.113131
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    Cited by:

    1. Jimenez, I. Sanchez & Ribó-Pérez, D. & Cvetkovic, M. & Kochems, J. & Schimeczek, C. & de Vries, L.J., 2024. "Can an energy only market enable resource adequacy in a decarbonized power system? A co-simulation with two agent-based-models," Applied Energy, Elsevier, vol. 360(C).
    2. Borbáth, Tamás & Van Hertem, Dirk, 2025. "Sharing the shortfall: Algorithmic solutions for fair demand curtailment in zonal power markets," Applied Energy, Elsevier, vol. 390(C).
    3. Nicolas Astier, 2025. "French Market Design in Practice: Some Lessons from the 2022 Energy Crisis," PSE Working Papers hal-04893886, HAL.
    4. Spilger, Maike & Schneider, Dennis & Weber, Christoph, 2025. "Uncertainty characterization for generation adequacy assessments – Including an application to the recent European energy crisis," Energy Economics, Elsevier, vol. 144(C).

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