An analysis of shortage pricing and capacity remuneration mechanisms on the pan-European common energy market

Mou, Yuting; Papavasiliou, Anthony; Hartz, Katharina; Dusolt, Alexander; Redl, Christian

dc.contributor.author	Mou, Yuting
dc.contributor.author	Papavasiliou, Anthony
dc.contributor.author	Hartz, Katharina
dc.contributor.author	Dusolt, Alexander
dc.contributor.author	Redl, Christian
dc.date.accessioned	2024-04-24T06:31:53Z
dc.date.available	2024-04-24T06:31:53Z
dc.identifier.uri	https://dspace.lib.ntua.gr/xmlui/handle/123456789/59260
dc.identifier.uri	http://dx.doi.org/10.26240/heal.ntua.26956
dc.rights	Αναφορά Δημιουργού 3.0 Ελλάδα	*
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/gr/	*
dc.subject	Energy-only market	en
dc.subject	Operating reserve demand curve	en
dc.subject	Shortage pricing	en
dc.subject	Capacity market	en
dc.subject	Renewable integration	en
dc.subject	Energy transition	en
dc.title	An analysis of shortage pricing and capacity remuneration mechanisms on the pan-European common energy market	en
heal.type	journalArticle
heal.classification	Energy policy	en
heal.access	free
heal.recordProvider	ntua	el
heal.publicationDate	2023-12
heal.bibliographicCitation	Mou, Y., Papavasiliou, A., Hartz, K., Dusolt, A., & Redl, C. (2023). An analysis of shortage pricing and capacity remuneration mechanisms on the pan-European common energy market. Energy Policy, 183, 113843.	en
heal.abstract	Various market design options have been implemented or proposed in order to address the missing money problem and facilitate the energy transition. In order to analyze the performance of energy-only markets, and energy markets supplemented by shortage pricing and/or capacity remuneration mechanisms, we develop a capacity expansion model for the European system. A number of market design scenarios are simulated until the year 2050. We consider a range of sensitivity analyses so as to understand the effect of various market design options on the performance of energy markets and their variants, as well as the effects of cross-border coordination. The findings of this paper indicate that capacity remuneration mechanisms are sensitive to numerous non-obvious design parameters and can sometimes lead to over-dimensioning, even if the effect on total cost can be less pronounced, whereas shortage pricing appears as a no-regret measure because price adders recede when there is abundant flexibility in the system.	en
heal.publisher	Elsevier	en
heal.journalName	Energy Policy	en
heal.journalType	peer-reviewed
heal.fullTextAvailability	false