Capacity Markets

IEEFA Research

IEEFA Update: A Rush to Subsidies as Power Plants in Europe Face an Existential Threat

IEEFA Update: A Rush to Subsidies as Power Plants in Europe Face an Existential Threat

Paying Producers for Electricity They Might Never Generate

  So-called capacity markets are driving what appears to be a major new trend in energy policy across Europe: More public subsidies for electric utilities. Utilities may get—but not necessarily need or deserve—high-level government support for a variety of reasons, including for their role in equity markets, where they supply returns and dividends for pension […]

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More News and Commentary

Germany’s ‘Energy Revolution’ Is Felt in Poland and Czechoslovakia

Zeke Turner for the Wall Street Journal: A battle is raging in Central Europe over the balance of power—the electrical kind. Poland and the Czech Republic see Germany as an aggressor, overproducing electricity and dumping it across the border. Germany sees itself as a green-energy pioneer under unfair attacks from less innovative neighbors. As part […]

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U.K. Electricity Auction Raises Questions on Coal Subsidies

Andrew Ward for the Financial Times: Coal-fired power generators were among the winners of contracts worth £378m to generate electricity next winter, highlighting the tension between government efforts to reduce carbon emissions and the need for energy security. Critics have highlighted the apparent contradiction between government plans to phase out all coal-fired power from the […]

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IEEFA Europe: Can Power Market Reforms Curb U.K. Ratepayer Handouts to Gas, Coal and Nuclear?

IEEFA Europe: Can Power Market Reforms Curb U.K. Ratepayer Handouts to Gas, Coal and Nuclear?

Capacity Subsidies May Be Redundant

The U.K. this week holds its biggest auction ever for electricity generating capacity under a multi-billion-pound scheme whose stated aim is to increase investment in new, flexible generation. The intent is to help balance the growth in variable wind and solar power while ensuring there are enough power plants to cover demand. Under the so-called […]

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Spain’s Hidden €1bn Subsidy to Coal, Gas Power Plants

Megan Darby for ClimateChangeNews.com: Spain is propping up old coal and gas-fired power plants with payments for staying open, regardless of how much they generate. The support, worth €1 billion a year, is a needless burden on consumers, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA). It is likely […]

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IEEFA Update: A Rush to Subsidies as Power Plants in Europe Face an Existential Threat

IEEFA Update: A Rush to Subsidies as Power Plants in Europe Face an Existential Threat

Paying Producers for Electricity They Might Never Generate

  So-called capacity markets are driving what appears to be a major new trend in energy policy across Europe: More public subsidies for electric utilities. Utilities may get—but not necessarily need or deserve—high-level government support for a variety of reasons, including for their role in equity markets, where they supply returns and dividends for pension […]

Read More →

IEEFA Report: Spain’s Outmoded Capacity Payment Structure Encourages Wasteful Subsidies for Coal and Gas, Thwarts Electricity-Sector Modernization

Reforms Should Include an Interconnected Grid, an Independent Regulator, and a More Transparent Market

Dec. 13, 2016 (IEEFA.org) – The Institute for Energy Economics and Financial Analysis (IEEFA) published a brief today showing how Spain provides inflated subsidies to owners of coal- and gas-fired power plants through an expensive electricity-sector capacity market. A dozen European countries, including France, Germany, Italy and the U.K., are either considering or already have […]

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IEEFA Europe: As Coal Wanes, German Utility Giant Uniper Looks to Regulated Markets

Is It Better to Subsidize Old Plants or Invest in the New Energy Economy?

Western European power prices have surged lately, partly on the back of a review of French nuclear plants. But coal-fired power plants have failed to capitalize on the trend, given price rises also for seaborne coal. As the Chief Executive of Uniper, Klaus Schäfer, told analysts this week, following the company’s Q3 earnings report: “A […]

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