An analysis of a forward capacity market with long-term contracts
We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in contr...
Gespeichert in:
| Veröffentlicht in: | Energy policy 2017-12, Vol.111, p.255-267 |
|---|---|
| Hauptverfasser: | , , , , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 267 |
|---|---|
| container_issue | |
| container_start_page | 255 |
| container_title | Energy policy |
| container_volume | 111 |
| creator | Bhagwat, Pradyumna C. Marcheselli, Anna Richstein, Jörn C. Chappin, Emile J.L. De Vries, Laurens J. |
| description | We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in controllable power plants when the share of variable renewable energy sources grows, but may create volatile prices themselves. Capacity markets with long-term contracts have been developed, e.g. in the UK, to stabilize capacity prices. In our analysis, a FCM is effective in providing the required adequacy level and leads to lower cost to consumers and more stable capacity prices, as compared to a yearly capacity market. In case of a demand shock, a FCM may develop an investment cycle, but it still maintains security of supply. Its main effect on the power plant portfolio is more investment in peak plant.
•Analysis of a forward capacity market (FCM) with long term contracts is presented.•An agent-based model of electricity markets is utilized for this analysis.•The forward capacity market (FCM) is compared to a yearly capacity market (YCM).•FCM is effective in providing required adequacy level, including in the case of a demand shock.•FCM leads to lower costs to consumers and more stable capacity market prices compared to a YCM. |
| doi_str_mv | 10.1016/j.enpol.2017.09.037 |
| format | Article |
| fullrecord | <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_journals_1984367483</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><els_id>S0301421517305967</els_id><sourcerecordid>1984367483</sourcerecordid><originalsourceid>FETCH-LOGICAL-c464t-e9c30b114d10c7ae047274d2e4edea8029ced4fde18fad4023eb9dcd5f9612e23</originalsourceid><addsrcrecordid>eNp9kDtPwzAUhS0EEqXwC1gsMSdcPxonA0NV8ZIqscBsufYNOKRxsV2q_ntSysx0l_NdnfMRcs2gZMCq267EYRP6kgNTJTQlCHVCJqxWoqiUUqdkAgJYITmbnZOLlDoAkHUjJ2Q-H6gZTL9PPtHQUkPbEHcmOmrNxlif93Rt4idmuvP5g_ZheC8yxjW1YcjR2JwuyVlr-oRXf3dK3h7uXxdPxfLl8XkxXxZWVjIX2FgBK8akY2CVQZCKK-k4SnRoauCNRSdbh6xujZPABa4aZ92sbSrGkYspuTn-3cTwtcWUdRe2cayeNGtqKSolazGmxDFlY0gpYqs30Y8L9pqBPrjSnf51pQ-uNDR6dDVSd0cKxwHfHqNO1uMwNvIRbdYu-H_5H_Lhc9Q</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1984367483</pqid></control><display><type>article</type><title>An analysis of a forward capacity market with long-term contracts</title><source>Elsevier ScienceDirect Journals Complete</source><source>PAIS Index</source><creator>Bhagwat, Pradyumna C. ; Marcheselli, Anna ; Richstein, Jörn C. ; Chappin, Emile J.L. ; De Vries, Laurens J.</creator><creatorcontrib>Bhagwat, Pradyumna C. ; Marcheselli, Anna ; Richstein, Jörn C. ; Chappin, Emile J.L. ; De Vries, Laurens J.</creatorcontrib><description>We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in controllable power plants when the share of variable renewable energy sources grows, but may create volatile prices themselves. Capacity markets with long-term contracts have been developed, e.g. in the UK, to stabilize capacity prices. In our analysis, a FCM is effective in providing the required adequacy level and leads to lower cost to consumers and more stable capacity prices, as compared to a yearly capacity market. In case of a demand shock, a FCM may develop an investment cycle, but it still maintains security of supply. Its main effect on the power plant portfolio is more investment in peak plant.
•Analysis of a forward capacity market (FCM) with long term contracts is presented.•An agent-based model of electricity markets is utilized for this analysis.•The forward capacity market (FCM) is compared to a yearly capacity market (YCM).•FCM is effective in providing required adequacy level, including in the case of a demand shock.•FCM leads to lower costs to consumers and more stable capacity market prices compared to a YCM.</description><identifier>ISSN: 0301-4215</identifier><identifier>EISSN: 1873-6777</identifier><identifier>DOI: 10.1016/j.enpol.2017.09.037</identifier><language>eng</language><publisher>Kidlington: Elsevier Ltd</publisher><subject>Adequacy ; Adequacy policy ; Agent-based modeling ; Alternative energy sources ; Capacity markets ; Capacity mechanisms ; Consumers ; Contracts ; Effectiveness ; Electric power generation ; Electric power plants ; Electricity ; Electricity market ; Energy policy ; Energy sources ; Investment ; Investments ; Markets ; Power plants ; Prices ; Pricing ; Renewable energy ; Renewable energy sources ; Renewable resources ; Security ; Security of supply</subject><ispartof>Energy policy, 2017-12, Vol.111, p.255-267</ispartof><rights>2017 The Author(s)</rights><rights>Copyright Elsevier Science Ltd. Dec 2017</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c464t-e9c30b114d10c7ae047274d2e4edea8029ced4fde18fad4023eb9dcd5f9612e23</citedby><cites>FETCH-LOGICAL-c464t-e9c30b114d10c7ae047274d2e4edea8029ced4fde18fad4023eb9dcd5f9612e23</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.sciencedirect.com/science/article/pii/S0301421517305967$$EHTML$$P50$$Gelsevier$$Hfree_for_read</linktohtml><link.rule.ids>314,776,780,3537,27843,27901,27902,65306</link.rule.ids></links><search><creatorcontrib>Bhagwat, Pradyumna C.</creatorcontrib><creatorcontrib>Marcheselli, Anna</creatorcontrib><creatorcontrib>Richstein, Jörn C.</creatorcontrib><creatorcontrib>Chappin, Emile J.L.</creatorcontrib><creatorcontrib>De Vries, Laurens J.</creatorcontrib><title>An analysis of a forward capacity market with long-term contracts</title><title>Energy policy</title><description>We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in controllable power plants when the share of variable renewable energy sources grows, but may create volatile prices themselves. Capacity markets with long-term contracts have been developed, e.g. in the UK, to stabilize capacity prices. In our analysis, a FCM is effective in providing the required adequacy level and leads to lower cost to consumers and more stable capacity prices, as compared to a yearly capacity market. In case of a demand shock, a FCM may develop an investment cycle, but it still maintains security of supply. Its main effect on the power plant portfolio is more investment in peak plant.
•Analysis of a forward capacity market (FCM) with long term contracts is presented.•An agent-based model of electricity markets is utilized for this analysis.•The forward capacity market (FCM) is compared to a yearly capacity market (YCM).•FCM is effective in providing required adequacy level, including in the case of a demand shock.•FCM leads to lower costs to consumers and more stable capacity market prices compared to a YCM.</description><subject>Adequacy</subject><subject>Adequacy policy</subject><subject>Agent-based modeling</subject><subject>Alternative energy sources</subject><subject>Capacity markets</subject><subject>Capacity mechanisms</subject><subject>Consumers</subject><subject>Contracts</subject><subject>Effectiveness</subject><subject>Electric power generation</subject><subject>Electric power plants</subject><subject>Electricity</subject><subject>Electricity market</subject><subject>Energy policy</subject><subject>Energy sources</subject><subject>Investment</subject><subject>Investments</subject><subject>Markets</subject><subject>Power plants</subject><subject>Prices</subject><subject>Pricing</subject><subject>Renewable energy</subject><subject>Renewable energy sources</subject><subject>Renewable resources</subject><subject>Security</subject><subject>Security of supply</subject><issn>0301-4215</issn><issn>1873-6777</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2017</creationdate><recordtype>article</recordtype><sourceid>7TQ</sourceid><recordid>eNp9kDtPwzAUhS0EEqXwC1gsMSdcPxonA0NV8ZIqscBsufYNOKRxsV2q_ntSysx0l_NdnfMRcs2gZMCq267EYRP6kgNTJTQlCHVCJqxWoqiUUqdkAgJYITmbnZOLlDoAkHUjJ2Q-H6gZTL9PPtHQUkPbEHcmOmrNxlif93Rt4idmuvP5g_ZheC8yxjW1YcjR2JwuyVlr-oRXf3dK3h7uXxdPxfLl8XkxXxZWVjIX2FgBK8akY2CVQZCKK-k4SnRoauCNRSdbh6xujZPABa4aZ92sbSrGkYspuTn-3cTwtcWUdRe2cayeNGtqKSolazGmxDFlY0gpYqs30Y8L9pqBPrjSnf51pQ-uNDR6dDVSd0cKxwHfHqNO1uMwNvIRbdYu-H_5H_Lhc9Q</recordid><startdate>20171201</startdate><enddate>20171201</enddate><creator>Bhagwat, Pradyumna C.</creator><creator>Marcheselli, Anna</creator><creator>Richstein, Jörn C.</creator><creator>Chappin, Emile J.L.</creator><creator>De Vries, Laurens J.</creator><general>Elsevier Ltd</general><general>Elsevier Science Ltd</general><scope>6I.</scope><scope>AAFTH</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7SP</scope><scope>7TA</scope><scope>7TB</scope><scope>7TQ</scope><scope>8BJ</scope><scope>8FD</scope><scope>DHY</scope><scope>DON</scope><scope>F28</scope><scope>FQK</scope><scope>FR3</scope><scope>H8D</scope><scope>JBE</scope><scope>JG9</scope><scope>KR7</scope><scope>L7M</scope></search><sort><creationdate>20171201</creationdate><title>An analysis of a forward capacity market with long-term contracts</title><author>Bhagwat, Pradyumna C. ; Marcheselli, Anna ; Richstein, Jörn C. ; Chappin, Emile J.L. ; De Vries, Laurens J.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c464t-e9c30b114d10c7ae047274d2e4edea8029ced4fde18fad4023eb9dcd5f9612e23</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2017</creationdate><topic>Adequacy</topic><topic>Adequacy policy</topic><topic>Agent-based modeling</topic><topic>Alternative energy sources</topic><topic>Capacity markets</topic><topic>Capacity mechanisms</topic><topic>Consumers</topic><topic>Contracts</topic><topic>Effectiveness</topic><topic>Electric power generation</topic><topic>Electric power plants</topic><topic>Electricity</topic><topic>Electricity market</topic><topic>Energy policy</topic><topic>Energy sources</topic><topic>Investment</topic><topic>Investments</topic><topic>Markets</topic><topic>Power plants</topic><topic>Prices</topic><topic>Pricing</topic><topic>Renewable energy</topic><topic>Renewable energy sources</topic><topic>Renewable resources</topic><topic>Security</topic><topic>Security of supply</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Bhagwat, Pradyumna C.</creatorcontrib><creatorcontrib>Marcheselli, Anna</creatorcontrib><creatorcontrib>Richstein, Jörn C.</creatorcontrib><creatorcontrib>Chappin, Emile J.L.</creatorcontrib><creatorcontrib>De Vries, Laurens J.</creatorcontrib><collection>ScienceDirect Open Access Titles</collection><collection>Elsevier:ScienceDirect:Open Access</collection><collection>CrossRef</collection><collection>Electronics & Communications Abstracts</collection><collection>Materials Business File</collection><collection>Mechanical & Transportation Engineering Abstracts</collection><collection>PAIS Index</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Technology Research Database</collection><collection>PAIS International</collection><collection>PAIS International (Ovid)</collection><collection>ANTE: Abstracts in New Technology & Engineering</collection><collection>International Bibliography of the Social Sciences</collection><collection>Engineering Research Database</collection><collection>Aerospace Database</collection><collection>International Bibliography of the Social Sciences</collection><collection>Materials Research Database</collection><collection>Civil Engineering Abstracts</collection><collection>Advanced Technologies Database with Aerospace</collection><jtitle>Energy policy</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Bhagwat, Pradyumna C.</au><au>Marcheselli, Anna</au><au>Richstein, Jörn C.</au><au>Chappin, Emile J.L.</au><au>De Vries, Laurens J.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>An analysis of a forward capacity market with long-term contracts</atitle><jtitle>Energy policy</jtitle><date>2017-12-01</date><risdate>2017</risdate><volume>111</volume><spage>255</spage><epage>267</epage><pages>255-267</pages><issn>0301-4215</issn><eissn>1873-6777</eissn><abstract>We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in controllable power plants when the share of variable renewable energy sources grows, but may create volatile prices themselves. Capacity markets with long-term contracts have been developed, e.g. in the UK, to stabilize capacity prices. In our analysis, a FCM is effective in providing the required adequacy level and leads to lower cost to consumers and more stable capacity prices, as compared to a yearly capacity market. In case of a demand shock, a FCM may develop an investment cycle, but it still maintains security of supply. Its main effect on the power plant portfolio is more investment in peak plant.
•Analysis of a forward capacity market (FCM) with long term contracts is presented.•An agent-based model of electricity markets is utilized for this analysis.•The forward capacity market (FCM) is compared to a yearly capacity market (YCM).•FCM is effective in providing required adequacy level, including in the case of a demand shock.•FCM leads to lower costs to consumers and more stable capacity market prices compared to a YCM.</abstract><cop>Kidlington</cop><pub>Elsevier Ltd</pub><doi>10.1016/j.enpol.2017.09.037</doi><tpages>13</tpages><oa>free_for_read</oa></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0301-4215 |
| ispartof | Energy policy, 2017-12, Vol.111, p.255-267 |
| issn | 0301-4215 1873-6777 |
| language | eng |
| recordid | cdi_proquest_journals_1984367483 |
| source | Elsevier ScienceDirect Journals Complete; PAIS Index |
| subjects | Adequacy Adequacy policy Agent-based modeling Alternative energy sources Capacity markets Capacity mechanisms Consumers Contracts Effectiveness Electric power generation Electric power plants Electricity Electricity market Energy policy Energy sources Investment Investments Markets Power plants Prices Pricing Renewable energy Renewable energy sources Renewable resources Security Security of supply |
| title | An analysis of a forward capacity market with long-term contracts |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-31T22%3A38%3A27IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=An%20analysis%20of%20a%20forward%20capacity%20market%20with%20long-term%20contracts&rft.jtitle=Energy%20policy&rft.au=Bhagwat,%20Pradyumna%20C.&rft.date=2017-12-01&rft.volume=111&rft.spage=255&rft.epage=267&rft.pages=255-267&rft.issn=0301-4215&rft.eissn=1873-6777&rft_id=info:doi/10.1016/j.enpol.2017.09.037&rft_dat=%3Cproquest_cross%3E1984367483%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1984367483&rft_id=info:pmid/&rft_els_id=S0301421517305967&rfr_iscdi=true |