In comments to the European Commission, RAP emphasized the importance of establishing effective market mechanisms to encourage investment in resources capable of providing critical system services, including energy efficiency and demand response resources. RAP also recommends reframing the issue to consider resource adequacy, instead of generation adequacy. As Europe’s power systems increase the share of variable renewable resources, existing capacity market models may no longer be up to their intended task of driving the investments required to deliver least-cost reliability. Mechanisms to reward resource flexibility will be needed. RAP also emphasized the importance of regional cooperation on questions of resource adequacy and investment, based on the broad expert consensus that sharing of system resources and services over the largest feasible geographical footprint is the lowest cost pathway to the low-carbon power sector. The Commission solicited public input as part of its Communication on “Making the Internal Energy Market Work,” which is designed to help meet the 2014 deadline for completing the internal energy market.
Reply to the Commission Consultation on Generation Adequacy, Capacity Mechanisms, and the Internal Market in Electricity
February 7, 2013