Former generation capacity expansion models were formulated as optimization problems. Theseincluded a reliability criterion and hence guaranteed security of supply. The situation is differentin restructured markets where investments need to be incentivised by the margin resulting fromelectricity...

We analyze a two-stage game of strategic firms facing uncertain demand and exerting market power in decentralized electricity markets. These firms choose their generation capacities at the first stage while anticipating a perfectly competitive future electricity spot market outcome at the second...