• Media type: E-Article
  • Title: The effectiveness of capacity markets in the presence of a high portfolio share of renewable energy sources
  • Contributor: Bhagwat, Pradyumna C. [Author]; Iychettira, Kaveri K. [Author]; Richstein, Jörn C. [Author]; Chappin, Emile J.L. [Author]; Vries, Laurens J. De [Author]
  • Published: Amsterdam: Elsevier, 2017
  • Language: English
  • DOI: https://doi.org/10.1016/j.jup.2017.09.003
  • ISSN: 0957-1787
  • Keywords: Capacity markets ; Security of supply ; Adequacy policy
  • Origination:
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  • Description: The effectiveness of a capacity market is analyzed by simulating three conditions that may cause suboptimal investment in the electricity generation: imperfect information and uncertainty; declining demand shocks resulting in load loss; and a growing share of renewable energy sources in the generation portfolio. Implementation of a capacity market can improve supply adequacy and reduce consumer costs. It mainly leads to more investment in low-cost peak generation units. If the administratively determined reserve margin is high enough, the security of supply is not significantly affected by uncertainties or demand shocks. A capacity market is found to be more effective than a strategic reserve for ensuring reliability.
  • Access State: Open Access
  • Rights information: Attribution (CC BY) Attribution (CC BY)