The recent electricity market design reform has redefined the role of capacity mechanisms in the EU. No longer seen as temporary safeguards, these instruments now benefit from a streamlined State aid approval process. At the same time, an increasing number of Member States are considering introducing capacity markets in the coming years.
As capacity mechanisms become a key tool to drive investment and ensure security of supply, effective cross-border coordination will be essential. Such coordination can help avoid under- or over-procurement and direct investments toward the most cost-efficient locations across Europe. If capacity markets continue to expand and consolidate, the next step could be to integrate them regionally.
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