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An Efficient Compensation System for Reserve Capacity in a Competitive Electricity Market (2020)

In many countries, producers receive financial compensation for maintaining reserve capacity on the grid. The purpose is to avoid scarcity events during which either the price of electricity becomes extremely high or consumers are curtailed in order to maintain system balance. This research paper shows how to design an efficient compensation mechanism in a market with a competitive electricity supply.

Project manager
Pär Holmberg

+46 (0)8 665 4559
+46 (0)72 511 6866
par.holmberg@ifn.se

Project participants
Robert A. Ritz