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Design criteria for implementing a capacity mechanism in deregulated electricity markets

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  • Batlle, Carlos
  • Pérez-Arriaga, Ignacio J.

Abstract

Over twenty years since electricity industry deregulation was first implemented, and nearly ten since many power systems boarded the liberalization train, reliability of supply appears to be the major concern of energy regulators. Drawing from the cumulative experience of systems that have already implemented some manner of security of supply mechanism, the present article reviews the main criteria to be taken into consideration in the design of a regulatory mechanism of this nature.

Suggested Citation

  • Batlle, Carlos & Pérez-Arriaga, Ignacio J., 2008. "Design criteria for implementing a capacity mechanism in deregulated electricity markets," Utilities Policy, Elsevier, vol. 16(3), pages 184-193, September.
    • Handle: RePEc:eee:juipol:v:16:y:2008:i:3:p:184-193
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    References listed on IDEAS

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    1. De Vries, Laurens J., 2007. "Generation adequacy: Helping the market do its job," Utilities Policy, Elsevier, vol. 15(1), pages 20-35, March.
    2. Cramton, Peter & Stoft, Steven, 2005. "A Capacity Market that Makes Sense," The Electricity Journal, Elsevier, vol. 18(7), pages 43-54.
    3. Batlle, Carlos & Vazquez, Carlos & Rivier, Michel & Perez-Arriaga, Ignacio J., 2007. "Enhancing power supply adequacy in Spain: Migrating from capacity payments to reliability options," Energy Policy, Elsevier, vol. 35(9), pages 4545-4554, September.
    4. Bidwell, Miles, 2005. "Reliability Options: A Market-Oriented Approach to Long-Term Adequacy," The Electricity Journal, Elsevier, vol. 18(5), pages 11-25, June.
    5. Peter Cramton & Steven Stoft, 2007. "Colombia Firm Energy Market," Papers of Peter Cramton 07cfem, University of Maryland, Department of Economics - Peter Cramton, revised 2007.
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