Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Research Institute of Industrial Economics (IFN) Working Paper Series

No 1162:
Equilibrium Supply Security in a Multinational Electricity Market with Renewable Production

Thomas Tangerås ()

Abstract: An increasing reliance on solar and wind power has raised concern about system ability to consistently satisfy electricity demand. This paper examines countries’ unilateral incentives to achieve supply security through capacity reserves and market integration in a multinational electricity market. Capacity reserves protect consumers against blackouts and extreme prices, but distort consumption and investment. Market integration alleviates supply constraints, but requires costly network reinforcement. Capacity reserves can be up- or downward distorted, but network investment is always insufficient in equilibrium. Capacity reserves are smaller when there are fi…nancial markets or when dispatched solely to resolve domestic supply constraints.

Keywords: Capacity mechanism; Decentralized policy making; Multinational electricity market; Network investment; Security of supply; (follow links to similar papers)

JEL-Codes: D24; H23; L94; Q48; (follow links to similar papers)

38 pages, April 11, 2017, Revised May 5, 2017

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp1162.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:iuiwop:1162 This page was generated on 2017-05-05 11:24:06