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The Use of Marginal Energy Costs in the Design of U.S. Capacity Markets

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Item Summary Moye, Robert Meyn, Sean 2017-12-28T01:03:51Z 2017-12-28T01:03:51Z 2018-01-03
dc.identifier.isbn 978-0-9981331-1-9
dc.description.abstract This paper surveys the development of marginal cost theories used in the optimal allocation of scarce resources, and examines the application of these theories to current-day electricity capacity markets. The different approaches in use today to ensure grid reliability and incentivize new resources are examined. Market challenges are surveyed, as well as empirical findings that suggest that current market approaches do not provide proper incentives. We conclude that the so-called "missing money" is not missing because of defects in market designs, or so-called administrative actions---money to incentivize investments is missing due to a misapplication of marginal cost theory.
dc.format.extent 10 pages
dc.language.iso eng
dc.relation.ispartof Proceedings of the 51st Hawaii International Conference on System Sciences
dc.rights Attribution-NonCommercial-NoDerivatives 4.0 International
dc.subject Markets, Policy, and Computation
dc.subject Capacity, Electricity, Marginal, Markets, Scarcity
dc.title The Use of Marginal Energy Costs in the Design of U.S. Capacity Markets
dc.type Conference Paper
dc.type.dcmi Text
dc.identifier.doi 10.24251/HICSS.2018.326
Appears in Collections: Markets, Policy, and Computation

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