Helpful studies, documents and policy papers
An electricity market for Germany's energy transition, BMWi (2015) - In English
This government document outlines the electricity market reform plans in Germany. It is a white paper, published by the German Ministry of Economics and Energy (BMWi), and gives an oversight of over 20 key legislative and regulative proposals. Details are often lacking and await the legislative process in the coming months, but some regard it as one of the most important publications of the Energiewende thus far.
A summary of the proposal can be found at Clean Energy Wire.
Inquiry on capacity mechanisms in the electricity sector, European Commission (2015) – In English
In April, the European Commission launched an inquiry into the use of capacity mechanisms by member states of the European Union to eventually determine if they are legally competitive and how they could and should be regulated. In English.
An Electricity Market for Germany's Energy Transition, BMWi (2014) - In German
In this green paper, published in late October 2014, the German government outlines the main options for reforming the German energy market. The energy ministry mostly weighs the pros and cons of introducing capacity markets for electricity and provides a good overview of the proposals on the table.
Studies by the Energy Ministry (2014) - In German
In July 2014, the energy ministry published three studies assessing the need for reform and the most important proposals. Overall, the consultants Frontier Economics, Consentet, Formaet Services and R2B Energy conclude that reform of the current energy market is sufficient to safeguard Germany’s energy supply.
Design of a decentralised capacity market, BDEW (2013) - In English
The biggest German electricity industry lobby organisation (BDEW) outlines its proposal for a capacity market, arguing that an explicit price for security of supply is needed but that it should be left to the market via a system of tradable certificates. The document also gives a good introduction to the general problem Germany is facing, since the BDEW has access to first-hand data.
Focused capacity markets. A new market design for the transition to a new energy system, DIW (2012) – In English
This study outlines the Öko-Institut’s proposal for focused capacity markets (commissioned by the WWF). It also gives an excellent overview of the tough choices Germany faces in the next decade in maintaining supply security while switching from coal and nuclear energy to renewables.
Investigation into a sustainable electricity market design for Germany
In this brief overview, consultancy EWI introduces its proposal for a capacity market based on security-of-supply-contracts. They also discuss the impact of a reserve capacity – a small fleet of power stations that produce electricity only in times of scarcity. In English.
Power Market Operations and System Reliability, Agora Energiewende (2014)
The Berlin-based think tank Agora Energiewende (which like the Clean Energy Wire, is funded by Stiftung Mercator Foundation and the European Climate Foundation) provides a brief introduction to the current mechanisms of the German electricity market and the challenges presented by the Energiewende. Agora has also compiled a further reading list on the subject. In English – further reading mostly in German.
Statkraft: Position on Capacity Markets for the German Power Market
In this paper Norwegian utility Statkraft, a major trader in Germany argues against the introduction of a capacity market in Germany, concluding that one should not intervene in a well-functioning market. It is a good summary and overview of the criticism of capacity markets in general. In English.
The Capacity Market: A Very Short Introduction, Open Energy Market (2014) - In English
A brief overview of capacity markets and a map indicating the status of regulation across Europe, by the trading platform Open Energy Market.
Capacity mechanisms in individual markets within the IEM (Internal Energy Market)
A study commissioned by the European Commission about the current need for electricity generation in Europe and capacity mechanisms in Europe. The study argues that 10 percent of current capacity needs to be added to secure supply and that member countries of the EU should work together to implement capacity mechanisms that are compatible. In English.
Electricity Market Review, Government of Western Australia (2014) - In English
This paper by the state of Western Australia tells a cautionary tale about capacity markets, exploring in depth drastic rises in power prices caused in part by the introduction of a capacity market in Western Australia. Consumers were badly hit, and the Australian authorities reacted with reform currently underway.
Knappheitspreise oder Kapazitätsmechanismen, Arrhenius Institut (2015) - In German
This study, conducted by Arrhenius Institut and commissioned by Allianz Climate Solutions (daughter of insurance company Allianz) and Germanwatch, an environmental NGO, voices fundamental scepticism about the Energy-Only-Market and its ability to attract investment in new power stations.
This Library is part of the following Dossiers: