Market Design for Resource Adequacy – A Reliability Insurance Overlay on Energy-Only Electricity Markets
Date Published: October 2019
Authors: Farhad Billimoria, Rahmatallah Poudineh
The paper proposes a new insurer-of-last-resort model to fix the problems created by centralized capacity mechanisms in energy-only markets. The model incorporates insurance-based risk management concepts and consumer preferences for system reliability into centralized resource adequacy decision-making. This market can function as a risk overlay on existing energy-only design.