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A survey on electricity market design : Insights from theory and real-world implementations of capacity remuneration mechanisms

Bublitz, Andreas; Keles, Dogan; Zimmermann, Florian ORCID iD icon; Fraunholz, Christoph; Fichtner, Wolf ORCID iD icon

Abstract:

Electricity markets are currently going through a phase of agitating transition, which is mainly characterized by an increasing share of fluctuating renewable energies. Among policy makers, this has led to growing concerns about generation adequacy and often to the introduction of different capacity remuneration mechanisms to generate less volatile sources of income for investors and, thereby, guaranteeing generation adequacy. However, these mechanisms entail new challenges regarding the best design to avoid any adverse effects. At the same time, it is disputed whether capacity remuneration mechanisms are indeed needed or whether an energy-only market is sufficient. Therefore, after discussing the peculiarities of the electricity markets, which are the starting point of the unique regulatory framework, an up-to-date overview of the debate on the need for capacity remuneration mechanisms is provided. In addition, the current status of capacity remuneration mechanisms in Europe is shown, and initial experience is presented. Furthermore, this article reflects the current state of research about capacity remuneration mechanisms in regards to, for example, cross-border effects, investment cycles or market power. ... mehr


Volltext §
DOI: 10.5445/IR/1000080063
Veröffentlicht am 08.02.2018
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Industriebetriebslehre und Industrielle Produktion (IIP)
Publikationstyp Forschungsbericht/Preprint
Publikationsjahr 2018
Sprache Deutsch
Identifikator ISSN: 2196-7296
urn:nbn:de:swb:90-800634
KITopen-ID: 1000080063
HGF-Programm 37.06.01 (POF III, LK 01) Networks and Storage Integration
Verlag Karlsruher Institut für Technologie (KIT)
Umfang 67 S.
Serie Working Paper Series in Production and Energy
Projektinformation AverS-KIT (BMWK, 0324002A)
REFLEX (EU, H2020, 691685)
Schlagwörter Electricity market, Market design, Generation adequacy, Capacity markets, Capacity remuneration mechanisms
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