ON AN "ENERGY ONLY" ELECTRICITY MARKET DESIGN FOR RESOURCE ADEQUACY

Abstract

An “energy only ” market design could avoid the need for increasingly prescriptive regulations targeted at ensuring resource adequacy. Transparent scarcity pricing would create better incentives for both operations and investment. An improved electricity market design would not eliminate all need for regulatory prescriptions. However, it would change the nature of the remaining problems and allow for market-based approaches that would not overturn the market.