بازارهای قابل اطمینان پیشرو: ریسک کمتر، قدرت بازار کمتر، بهره وری بیشتر

A forward reliability market is presented. The market coordinates new entry through the forward procurement of reliability options—physical capacity bundled with a financial option to supply energy above a strike price. The market assures adequate generating resources and prices capacity from the bids of competitive new entry in an annual auction. Efficient performance incentives are maintained from a load-following obligation to supply energy above the strike price. The capacity payment fully hedges load from high spot prices, and reduces supplier risk as well. Market power is reduced in the spot market, since suppliers enter the spot market with a nearly balanced position in times of scarcity. Market power in the reliability market is addressed by not allowing existing supply to impact the capacity price. The approach, which has been adopted in New England and Colombia, is readily adapted to either a thermal system or a hydro system.

The forward reliability market approach described here is the product of a systematic development based on clear economic principles. Indeed, once it is understood it seems almost inevitable. The first step is the classic VoLL pricing system which is known to be both short- and long-run optimal if VoLL is known and risk and market power are assumed to be costlessly suppressed by unspecified means. The second step is to suppress risk and market power, the two evils of VoLL pricing, by introducing reliability options. These do not interfere with real-time price signals, so on the second step, the market retains the dispatch optimality of classic VoLL pricing, but without the problems. The second step suppresses a significant amount of generation revenue and thereby destroys the investment incentive, so the third step restores it by introducing a capacity market, which induces an adequate level of investment by procuring the appropriate quantity of reliability options. All generation, new and existing will want to sell reliability options for their full capacity because these options fetch a high price relative to the financial cost of the option. Participation in this market is guaranteed by the rule that non-participating generators receive the spot price capped at the option strike price. The auction for procuring reliability options takes place three years in advance of the effective date, so that there is time for new entry to back the options. To suppress market power in the reliability-option auction, only new capacity bids are allowed to set the price. The auction is a descending clock auction. By inducing investment with an auction instead of high prices, not only does the regulator have better control of the average reliability level, but far better investment coordination is assured. Investment coordination prevents the boom-bust cycles which increase both investor risk and reliability risk for consumers. Without an auction, as the market tightens it offers an increasingly large prize for the next entrant. However, entry is a secretive process, and so simultaneous entry is possible. Aware of this, investors are torn between holding off until the prize is large enough to support some simultaneous entry and entering quickly to ward off competition. The optimal strategy is mixed and the outcome chaotic. With an auction, the TSO coordinates entry without reducing competition. There are multiple simultaneous bids, but the TSO selects only as many as needed. This stability benefits both consumers and investors. While there are many concerns about the use of reliability options, with the designs specified here, none prove warranted. There is no difficulty in deciding which private contracts are acceptable substitutes for reliability options, because no substitutes are accepted. One hundred percent coverage by reliability options does not interfere with 100% coverage with bilateral contracts. Reliability options provide price coverage above the strike price; bilateral contracts provide price coverage below the strike price. Although reliability options limit the average real-time price to the strike price, the marginal price for both load and investors remains the balancing market prices. This preserves incentives and prevents any increase in exports relative to the present system even on days when other countries have high prices. The benefits of this design are significant. The design minimizes risk and market power, while coordinating efficient entry.