Room for capacity mechanisms in the electricity market design of the future? | Juan Alba Rios

Recorded 18 May 2017, Brussels Description: Nicolò Rossetto (FSR) and Juan Alba Rios (chairman of the EURELECTRIC Markets Committee) discuss the 2016 legislative proposals of the European Commission on a new market design for the electricity sector. Alba Rios expresses a positive view on the proposal, which strengthens the role of markets in providing signals to economic actors and acknowledges the possibility of establishing capacity remuneration mechanisms to complement the existing energy-only markets. Indeed, short-term scarcity prices are not enough to foster adequate investment decisions in generation capacity and must be supported by additional, market-based, incentives. According to EURELECTRIC, although the Commission's proposal is not perfect, it goes in the right direction and provides a good starting point for building the market design of the future.