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Title:
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Discussion Paper: Generation Capacity Investments and High Levels of Renewables. The Impact of a German Capacity Market on Northwest Europe
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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24-5-2013
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ECN report number:
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Document type:
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ECN-E--13-030
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ECN publication
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Number of pages:
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Full text:
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34
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Download PDF
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Abstract:
Presently, Northwest European centralised electricity markets are designed as ‘energy-only’ markets. In an energy-only market, the price received for electricity produced is set by the marginal generation unit. Potentially, the designs of these markets could leave the owners of these units with ‘missing money’: i.e. money that is required to recover investment cost. Further, increasing penetration of renewables could exacerbate this problem. Of all the different options available to tackle the ‘missing money’ problem, capacity mechanisms have attracted most of the attention in recent policy debates in Europe.
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