Impact of demand response on resource adequacy due to an early coal phase-out in Germany

For this study, the agent-based electricity market simulation model PowerACE is applied to investigate the impact of demand response (DR) on resource adequacy against the background of a coal phase-out in 2030. In addition, two market designs (current implementation and Europe-wide capacity market) are investigated. The results show that demand shortfalls cannot be avoided under the current energy-only market/strategic reserve market design due to a coal phase-out in 2030 in Germany. Even under a capacity market, timely investments to guarantee resource adequacy are not certain, but the shortfall risk is substantially lower. Therefore, market design adoptions in Germany appear necessary. DR can contribute to ensuring resource adequacy in both scenarios and significantly reduce the Loss of Load Expectation (LOLE) and Energy not Served (ENS). However, DR alone is not sufficient to guarantee resource adequacy solely.