The “Beyond Capacity Markets” presentation discusses reasons why, in power systems with large shares of variable renewable production, existing capacity market models may no longer be up to their intended task of driving the investments required to deliver least-cost reliability. This presentation follows up on that analysis by addressing the question of what regulators and policymakers should do in response to these concerns.
Around the world, the ultimate aim of those involved in regulating a monopoly power sector or designing and overseeing competitive electricity markets is to find the set of rules and practices that efficiently and reliably delivers the right amount and the right mix of resources. Many different approaches have been taken and all have been subject to multiple revisions. The next challenge is to understand and address how the growing share of variable renewable production will require us to rethink our current practices. While many of the discussion points apply equally to all industry structures, our primary focus is on adapting competitive wholesale power markets to deliver their intended economic efficiency and reliability outcomes under this new resource paradigm.