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Expert survey on capacity markets in the US: Lessons for the EU

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  • Bhagwat, Pradyumna C.
  • de Vries, Laurens J.
  • Hobbs, Benjamin F.

Abstract

We present a survey of US capacity market experts with the purpose of drawing lessons for the EU. Of the respondents, 41% advised EU member states against implementing capacity markets, while the remaining were neutral or provided suggestions for improving capacity markets. Cross-border effects are currently not a concern but may become so in the future. Imports may dampen prices in a capacity market, but neighbouring markets may also experience pressure to implement a capacity market. The capacity markets in the USA were believed to have achieved their goals with respect to reliability, but in an economically inefficient manner.

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  • Bhagwat, Pradyumna C. & de Vries, Laurens J. & Hobbs, Benjamin F., 2016. "Expert survey on capacity markets in the US: Lessons for the EU," Utilities Policy, Elsevier, vol. 38(C), pages 11-17.
    • Handle: RePEc:eee:juipol:v:38:y:2016:i:c:p:11-17
    DOI: 10.1016/j.jup.2015.11.005
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    14. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2018. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Working Paper Series in Production and Energy 27, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
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