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Title:
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Financing investment in new electricity generation capacity in 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-O--13-022
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Other
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Number of pages:
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Full text:
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15
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Download PDF
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Abstract:
Current Northwest European 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 and potentially leaves the owners of these units with ‘missing money’: i.e. money that is required to recover investment cost. With a much higher penetration of intermittent electricity sources such as wind and solar PV, these markets may not be capable of providing sufficient incentives for investment in generation capacity, because operating hours and scarcity rents for peak and mid-merit order capacity will be considerably reduced.
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