Type: Working Paper
Incentive or impediment? : the impact of capacity mechanisms on storage plants
Working Paper, EUI RSCAS, 2013/46, [Florence School of Regulation], [Energy]
SCHMITZ, Katrin, STEFFEN, Bjarne, WEBER, Christoph, Incentive or impediment? : the impact of capacity mechanisms on storage plants, EUI RSCAS, 2013/46, [Florence School of Regulation], [Energy] - https://hdl.handle.net/1814/27414
Retrieved from Cadmus, EUI Research Repository
Capacity remuneration mechanisms are a widespread instrument to foster investment. The growing interest in electricity storage raises the question how these mechanisms interact with storage plants. Using a stylized capacity planning model, we demonstrate that an exclusion of storage plants from capacity mechanisms leads to welfare losses. Even if storages are not explicitly excluded, the setup of capacity mechanisms can discriminate storage implicitly we therefore discuss typical mechanism design parameters and their impact on storage plants. Three case studies describe the actual situation of storage plants in the PJM system, Ireland and Spain. Finally the findings are summarized to general principles for storage-compatible capacity mechanisms.
Cadmus permanent link: https://hdl.handle.net/1814/27414
Series/Number: EUI RSCAS; 2013/46; [Florence School of Regulation]; [Energy]