This paper presents an overview of the issue of resource adequacy in general, and the specific problems presented by restructured markets for ensuring adequate investment in generation capacity. The theory of investment in ideal markets is contrasted with the actual behavior of investors in US...

In this paper, we present a straightforward economic model that explains the incentives to manipulate nodal energy prices in a “Day 2” RTO market. The model distinguishes between legitimate market participation that increases overall market efficiency and manipulative behavior that distorts...

Credit risk may be warehoused by choice, or because of limited hedging possibilities. Credit risk warehousing increases capital requirements and leaves open risk. Open risk must be priced in the physical measure, rather than the risk neutral measure, and implies profits and losses. Furthermore...

The harmonization and integration of separate national energy markets to an interconnected internal European market is a top priority of the European Commission. However, as energy policy largely remains subject to national sovereignty, a higher degree of integration can cause unilateral...

Subsidies to renewable energy are costly and contentious. We estimate the reduction in prices that follows from the subsidized entry of wind power in the Nordic electricity market. A relatively small-scale entry of renewables leads to a large-scale transfer of surplus from the incumbent...

In the 1990s and early 2000s, a series of state and federal initiatives restructured electric markets. In many areas of the country generation was unbundled from transmission and distribution and competitive markets for energy generation were established. A decade has now passed since many of...

This analysis considers improvements in productive efficiency that can result from a movement from a regulated framework to one that allows for market-based incentives for industry participants. Specifically, I look at the case of restructuring in the electricity generation industry. As numerous...

The construction of a second Baltic Sea natural gas pipeline from Russia to Germany (Nord Stream 2) is very controversial for political, energy economic, and ecological reasons. The project owner and some European energy companies argue that it is a profitable, private-sector investment project...

Der Bau der zweiten Ostsee-Erdgaspipeline (Nord Stream 2) ist aus politischen, energiewirtschaftlichen und ökologischen Gründen sehr umstritten. Der Projektbetreiber und einige europäische Energieversorgungsunternehmen argumentieren, es handele sich um ein privatwirtschaftlich angelegtes,...

In den letzten Jahren wird vermehrt die Sorge geäußert, dass die Energiewende die Sicherheit der Stromversorgung in Deutschland langfristig durch Engpässe und Stromausfälle gefährden könnte. Während der Ausbau von volatiler Stromerzeugung aus Wind- und Sonnenenergie mit hohem Tempo...