research product . Other ORP type . 2019

Transition to a Capacity Auction: a Case Study of Ireland

Lazarczyk, Ewa; Ryan, L. (Lisa B.);
Open Access English
  • Published: 01 Jun 2019
  • Publisher: International Association of Energy Economics
  • Country: Ireland
Abstract
Modern electricity markets are characterized by increasing shares of intermittent production which has almost zero marginal costs. The effect of introducing large amounts of cheap power into the system is known as the merit order effect – a shift of a supply curve to the right which delivers lower equilibrium prices. The lower prices and the fact that fossil-fuel generators are used less often exacerbate adequacy problems – there is a threat that not enough generating capacity will be available in the system since generators´ revenues are low and investment needs are not met. This and the fact that energy markets are often capped in order to prevent market power...
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free text keywords: Capacity markets, Electricity markets, Auctions, Energy economics
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