electricity markets

by Simona Benedettini - The European Commission has recently launched a state aid sector inquiry on Member States’ capacity mechanisms. The UK is not included in the inquiry given that its capacity market, currently running, has been already approved by the EC in the light of state aid rules.
Nonetheless, a more detailed insight into the UK capacity mechanism leads to some considerations about whether its ability to promote generation adequacy in a competitive and cost-effective manner may be involuntarily jeopardized by some of its features.

by ISPI Energy Watch - The road to Energy Union is paved of good intentions but to a lesser extent of good works. Actually, though Energy Union is a top priority agenda item, as recently stated by the newly appointed commissioners Miguel Arrias Cañete and Maroš Šefčovič, the realization of the necessary electricity infrastructure is still a chimera.

by Nicolò Rossetto - The year just behind us has been a tough one for the Italian electricity sector. As the data recently released by Terna and the Gestore dei Servizi Energetici shows, output and prices decreased vis-à-vis 2013 and they are now significantly lower than the heights reached before the economic crisis. Indeed, what seemed to be only a temporary halt in the always increasing trend of consumption is now something more like a structural change. Utilities and public authorities should be aware of that and be ready for a significant transformation of business models as well as for a fundamental downsizing of the industry.

by Simona Benedettini - On December 16th, the first-ever capacity market auction in Europe has been held in UK. Great Britain is the first Member State implementing a capacity market to ensure supply security in the long-term, for its electricity sector. The design of the British capacity remuneration mechanism, and the results of the opening auction, provides useful insights to the debate currently interesting Europe about resource adequacy. In the following, once illustrated the theoretical and empirical background concerning the adoption of capacity remuneration mechanisms, a discussion of the features and results of the British auctions is developed. The analysis highlights important aspects to be kept in mind by those countries in the process of adopting a capacity market, including the contradictions between European and national energy policies that may arise even in the case of a well-designed mechanism such the UK ones.