Documents

DOI

The cross-border effects of a capacity market and a strategic reserve in interconnected electricity markets are modeled using an agent-based modeling methodology. Both capacity mechanisms improve the security of supply and reduce consumer costs. Our results indicate that interconnections do not affect the effectiveness of a capacity market, while a strategic reserve is affected negatively. The neighboring zone may free ride on the security of supply provided by the zone implementing a capacity mechanism. However, a capacity market causes crowding out of generators in the energy-only zone. A strategic reserve implemented by this region could aid in mitigating this risk.

Original languageEnglish
Pages (from-to)33-47
Number of pages15
JournalUtilities Policy: strategy, performance, regulation
Volume46
DOIs
Publication statusPublished - 1 Jun 2017

    Research areas

  • Capacity market, Cross-border effect, Strategic reserve

ID: 23232172