This paper calls into question the fuel neutrality of capacity mechanisms implemented in liberalized electricity markets. The argument relies on two assumptions likely satisfied in practice, first that investors are risk averse and second that markets in risk are incomplete. For the analysis, we...

Non-convex markets, such as those organized by electricity system operators, lack uniform clearing prices. To help resolve the incentive compatibility issues that arise when clearing these markets, operators have introduced a variety of price formation and uplift payment schemes. We investigate...