Cross-border effects of capacity mechanisms

Author

Bhagwat, Pradyumna C. ; Iychettira, Kaveri ; de Vries, Laurens J.

Author_Institution

Fac. of Technol., Policy & Manage., Delft Univ. of Technol., Delft, Netherlands

fYear

2014

fDate

28-30 May 2014

Firstpage

1

Lastpage

5

Abstract

This paper uses an agent-based model of interconnected electricity market to analyze the cross-border impact of a capacity market and a strategic reserve on consumer costs and on investment in generation capacity in the affected markets. We find that both capacity mechanisms can improve investment signals and cause positive cross border effects. The interconnected energy-only market could free ride on the additional capacity and may deter investment in this market. If a capacity market and a strategic reserve are implemented in neighboring regions, there appears to be a negative spillover effect on the strategic reserve due to the capacity market.

Keywords

power markets; agent-based model; cross-border effects; electricity generation capacity market; interconnected electricity market; Educational institutions; Electricity; Electricity supply industry; Europe; Investment; Load modeling; Power generation; capacity market; capacity mechanisms; cross-border effect; security of supply; strategic reserve;

fLanguage

English

Publisher

ieee

Conference_Titel

European Energy Market (EEM), 2014 11th International Conference on the

Conference_Location

Krakow

Type

conf

DOI

10.1109/EEM.2014.6861269

Filename

6861269