Missing Money and Missing Markets: Reliability, Capacity Auctions and Interconnectors
By David Newbery. 2015
288 citations recorded by the source corpus.
In the energy trilemma of reliability, sustainability and affordability, politicians treat reliability as over-riding. The EU assumes the energy-only Target Electricity Model will deliver reliability but the UK argues that a capacity remuneration mechanism is needed. This paper argues that capacity auctions tend to over-procure capacity, exacerbating the missing money problem they were designed to address. The bias is further exacerbated by failing to address some of the missing market problems also neglected in the debate. It examines the case for, criticisms of, and outcome of the first GB capacity auction and problems of trading between different capacity markets.
Subfields: Electrical and Electronic Engineering, Finance
View Paper: https://www.semanticscholar.org/paper/34cd8d079ef8744af912511e74176d2884531f28
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Electrical and Electronic Engineering
- Michael Pollitt
- Michael Grubb
- David Newbery
- W. Strielkowski
- Robert A. Ritz
- P. Joskow
- Tooraj Jamasb
- Pablo Arocena
In Finance
- Michael Pollitt
- Michael Grubb
- W. Strielkowski
- Robert A. Ritz
- David Newbery
- P. Joskow
- Pablo Arocena
- C. Price
Citations in the corpus
- UK Electricity Market Reform and the Energy Transition:Emerging Lessons (2018, background): “therefore need to be confident that the market conditions over the next 20-30 years are moderately predictable on the basis of existing laws and policies, and that demand and supply conditions are set by commercial conditions (Newbery, 2015).”
- Solar, wind and logistic substitution in global energy supply to 2050 – Barriers and implications (2022, unknown): “…structures in which capital costs are repaid through high unit costs during periods of scarcity, through hybrid concepts such as contracts-for-difference, to a partial retreat to vertically integrated utilities in which optimal plant mixes are determined by energy system planners off-line [66–68].”
- Market design for a high-renewables European electricity system (2018, background): “For example, the results of the UK’s auctions since 2014 suggest that these undercut the administrative prices offered by governments by a significant margin (Newbery, 2016a).”