Expert survey on capacity markets in the US

Lessons for the EU

Journal article (2016)

Authors

P.C. Bhagwat Energy and Industry
Laurens De Vries Energy and Industry
B.F. Hobbs Johns Hopkins University
Research Group
Energy and Industry
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Published Date

2016

Language

English

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Research Group

Energy and Industry

Abstract

We present a survey of US capacity market experts with the purpose of drawing lessons for the EU. Of the respondents, 41% advised EU member states against implementing capacity markets, while the remaining were neutral or provided suggestions for improving capacity markets. Cross-border effects are currently not a concern but may become so in the future. Imports may dampen prices in a capacity market, but neighbouring markets may also experience pressure to implement a capacity market. The capacity markets in the USA were believed to have achieved their goals with respect to reliability, but in an economically inefficient manner.