Book contents
- Electricity Capacity Markets
- Electricity Capacity Markets
- Copyright page
- Contents
- Figures
- 1 Introduction
- 2 Capacity Markets Primer
- 3 Restructured Electricity Markets and Regional Transmission Organizations
- 4 Reliability and the Missing Money Problem
- 5 Capacity Policies
- 6 First-Generation Capacity Markets
- 7 Second-Generation Capacity Markets
- 8 Capacity Market Demand
- 9 Capacity Market Supply
- 10 Capacity Market Design
- 11 Market Power
- 12 Minimum Offer Price Rules
- 13 The Texas Alternative
- 14 Conclusion
- Index
- References
5 - Capacity Policies
Published online by Cambridge University Press: 24 February 2022
Book contents
- Electricity Capacity Markets
- Electricity Capacity Markets
- Copyright page
- Contents
- Figures
- 1 Introduction
- 2 Capacity Markets Primer
- 3 Restructured Electricity Markets and Regional Transmission Organizations
- 4 Reliability and the Missing Money Problem
- 5 Capacity Policies
- 6 First-Generation Capacity Markets
- 7 Second-Generation Capacity Markets
- 8 Capacity Market Demand
- 9 Capacity Market Supply
- 10 Capacity Market Design
- 11 Market Power
- 12 Minimum Offer Price Rules
- 13 The Texas Alternative
- 14 Conclusion
- Index
- References
Summary
Capacity policies are designed to enhance grid reliability by increasing investment in electricity generation capacity. Because capacity is perceived to be undervalued in the market, capacity policies attempt to induce demand for capacity through regulatory mandates. These mandates take several forms. Some capacity policies create new policy markets for capacity, while others attempt to create value for capacity within existing electricity markets. Capacity policies can be evaluated based on how well they ensure adequate capacity, their costs, their effects on the energy market, their practical feasibility, and their vulnerability to the exercise of market power.
- Type
- Chapter
- Information
- Electricity Capacity Markets , pp. 54 - 73Publisher: Cambridge University PressPrint publication year: 2022
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