/ Publications / An easy fix to streamline capacity markets
Energy | Policy Brief
An easy fix to streamline capacity markets
22 November 2024
Authors: MENEGATTI, Emma Solène; MEEUS, Leonardo
Following the EMD reform of 2024, the Commission is tasked to publish a report on the ‘possibilities of streamlining and simplifying the process of applying for a capacity mechanism’ by January 2025. One approach to streamlining is to relax burdensome requirements that are not particularly beneficial. In this policy brief, we explore one such requirement which is today critical for capacity markets: explicit cross-border participation. Our short-term recommendation is to relax this requirement because 1. it is particularly burdensome for Member States to implement, and 2. it can be temporarily replaced by implicit cross-border participation, which is easier to implement and achieves comparable results. The EMD reform of 2024 moreover promoted capacity mechanisms as a “structural element of the electricity market design”. However, they remain conceived and operated at the national level. Having national capacity mechanisms in an international electricity market leads to costly problems, which cannot be properly solved by any form of cross-border participation. Our long-term recommendation is therefore to reflect on alternative European solutions.
Adequate, reliable and well interconnected energy networks are a prerequisite for a well functioning internal energy market and for meeting EU’s energy and climate policy objectives on greenhouse gases, cost-competitiveness [...]
Electricity network companies can innovate their own network business or stimulate system innovation, including by facilitating market activities and the integration of renewable energy sources. Regulation is essential to turn [...]
To enable deep electrification of the economy, a significant expansion of grid distribution capacity will be required. However, how much grid investments eventually will be needed depends on how the [...]
Join our community
To meet, discuss and learn in the channel that suits you best.
We use cookies to help personalise content and provide a better experience. By clicking Accept all, you agree to this, as outlined in our Cookie Policy. To change preferences or withdraw consent, please update your Cookie Preferences.