Cross-border effects of capacity mechanisms in interconnected power systems

Authored by Emile J L Chappin, Jorn C Richstein, Vries Laurens J de, Pradyumna C Bhagwat, Kaveri K Iychettira

Date Published: 2017

DOI: 10.1016/j.jup.2017.03.005

Sponsors: European Union

Platforms: No platforms listed

Model Documentation: Other Narrative Flow charts

Model Code URLs: Model code not found

Abstract

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. (C) 2017 The Authors. Published by Elsevier Ltd.

Tags

Reliability Model EU Energy Markets Generation Failures Capacity market Reserve Cross-border effect Strategic reserve