Title: Integration of European Capacity Remuneration Mechanisms: In Search of a Harmonised Regulatory Framework
Abstract: Liberalisation of electricity markets in Europe produces challenges for ensuring generation adequacy. There are rising concerns in Europe regarding the capability of energy-only markets to provide adequate security of supply. Accordingly, some European governments have introduced or are contemplating the introduction of capacity remuneration mechanisms (CRMs) in their jurisdictions with a unilateral approach. It is known, however, that fragmented and uncoordinated capacity mechanisms in integrated electricity markets, as in Europe, might cause inefficiencies and distort cross-border trade. These developments raise the controversial issue of creating a regulatory framework to integrate CRMs in Europe.Integration of European CRMs, in this study, is defined as accepting foreign capacity resources (i.e. allowing cross-border participation where physically possible) to national CRMs. Justifications for integration are put forward from both legal and economic perspectives. Consequently, the study proposes minimum regulatory requirements to harmonise, and thus integrate, national CRMs in Europe. These regulatory requirements include the following: Harmonised Generation Adequacy Assessments; Respecting Contracted Capacity Obligations; Allocation of Interconnectors ‘ Capacity; and No Double Counting.
Publication Year: 2018
Publication Date: 2018-09-21
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 1
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