Energy markets are often said to suffer from a “missing money” problem. While the analysis behind these claims is often muddled, there can be legitimate concerns about whether energy markets are adequately remunerating needed investment. In assessing proposals to address these concerns, regulators and policymakers must avoid creating a different problem: misallocated money, overcompensating some resources and undercompensating others. As we transition to a low-carbon future, the difference between getting needed investment right and getting it wrong could be as much as 30 percent.
During this webinar, Michael Hogan, author of RAP’s new report, Hitting the Mark on Missing Money: How to Ensure Reliability at Least Cost to Consumers, unpacks the core issues for non-specialists. He addresses:
- How energy pricing drives investment in the design of wholesale electricity markets;
- The growing challenge of investing in resource capabilities, rather than simply capacity;
- How money goes missing from energy prices and the consequences for investment; and
- Alternatives for recouping “missing money” to meet demand for reliability at least cost to consumers, especially as we transition to a low-carbon power system.