Resource Adequacy
While locational marginal pricing assures efficient pricing in short-run energy markets, decentralized energy markets also need to provide long-run incentives for investment in new capacity and for the continued operation of existing capacity. The papers below discuss the two primary alternatives for sustaining resource adequacy, capacity markets and "energy only" markets (actually energy and ancillary service markets), as well as some other designs used to assure resource adequacy.
These papers also explain the reasons why implementation of economic dispatch by power pools and ISOs requires explicit development of resource adequacy mechanisms. The papers also discuss the detailed issues involved in the implementation of both energy only market and capacity markets.
James Bushnell, Scott Harvey, Benjamin Hobbs, "Opinion on Market Enhancements for Summer 2021 Readiness," Market Surveillance Committee of the California ISO, March 8, 2021.
Scott Harvey, "Capacity Based Resource Adequacy Mechanisms: Evolution or Extinction," December 16, 2020.
Jason Mann, Nicholas Brooks, Susan Pope, William Hogan and Fabien Roques, "Resource Adequacy Mechanisms in the National Electricity Market - A Report for the Energy Security Board," July 16, 2020"
Willian Hogan and Susan Pope, "PJM Reserve Markets Operating Reserve Demand Curve Enhancements," March 21, 2019"
William Hogan, "Best Electricity Market Design Practices," January 2018.
William Hogan, "Comments on State Policies and Wholesale Electricity Markets," Docket AD17-11-000 May 2, 2017.
Scott Harvey, "Fundamentals of Capacity Market Design and Performance," EUCI Capacity Markets Conference, Cambridge MA, August 31, 2015
Scott M. Harvey, "Capacity Market Reforms: What are the Problems we are Trying to Address," Northeast Energy and Commerce Association, Power Markets Conference, October 30, 2014.
William Hogan, "Electricity Scarcity Pricing and Resource Adequacy," Harvard Electricity Policy Group, February 27, 2014.
Scott M. Harvey, "Evolving Away from an Energy-Only Market, or Evolving the Energy-Only Market," ERCOT Market Summit, February 24, 2014.
Scott M. Harvey and Joe Cavicchi, "Forward Capacity Auctions" Capacity Markets Conference, November 7, 2013.
William W. Hogan, "Electricity Pricing Through Operating Reserves," April 25, 2013.
William W. Hogan, ERCOT Staff, "Back Cast of Interim Solution B+ to Improve Real-Time Scarcity Pricing," March 21, 2013.
Scott M. Harvey, William W. Hogan, and Susan L. Pope, "Evaluation of the New York Capacity Market," prepared for the New York ISO, March 5, 2013.
William W. Hogan, "Electricity Pricing Through Operating Reserves: An ERCOT Window of Opportunity," Nov 1, 2012.
Scott M. Harvey, "Resource Adequacy Alternatives and Their Consequences," Gulf Coast Power Association Fall Conference, October 3, 2012
Scott M. Harvey, "Reserve Shortage Pricing and Capacity Markets," EUCI Ancillary Services Markets and Operations Conference, June 13, 2012
William W. Hogan, "Comments on PJM Minimum Offer Price Rule." FERC Technical Conference, Docket EL11-20-001, August 25, 2011.
William W. Hogan, "Electricity Market Reform: Market Design and Resource Adequacy," Toulouse, June 15, 2011.
Scott M. Harvey and Scott Travers, "Market Incentives for Generation Investment," Discussion Paper prepared in support of IESO's 2009 Ontario Market Outlook (released January 15, 2009), December 2, 2008.
Scott M. Harvey, "Resource Adequacy Mechanisms: Spot Energy Markets and Their Alternatives," Rutgers Center for Research in Regulated Industries, 19th Annual Western Conference, Monterey, California, Revised June 28, 2006.
William W. Hogan, "On an 'Energy Only' Electricity Market Design for Resource Adequacy," September 23, 2005.