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HICSS
2000
IEEE

Capacity Payments and the Pricing of Reliability in Competitive Generation Markets

8 years 9 months ago
Capacity Payments and the Pricing of Reliability in Competitive Generation Markets
: In restructured electric power industries around the world, power pool designers have enabled generators to earn revenues consisting of energy and capacity payments. This paper discusses uses and abuses of capacity payments, and links provision of these payments to the issue of pricing reliability. A general formula for determining the ideal capacity price in a generation supply system is presented and the theoretical basis discussed. Methods of achieving an ideal level of system reliability through price-setting of capacity payments (in more regulated markets) and through price discovery (in more competitive markets) are contrasted. The paper concludes with market design recommendations that could better realize customer preference for reliability at prices customers are willing to pay.
Angela S. Chuang, Felix F. Wu
Added 31 Jul 2010
Updated 31 Jul 2010
Type Conference
Year 2000
Where HICSS
Authors Angela S. Chuang, Felix F. Wu
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