Capacity Markets

IEEFA Research

IEEFA Australia: There’s a better way to manage coal closures than paying to delay them

IEEFA Australia: There’s a better way to manage coal closures than paying to delay them

Energy Ministers and the energy industry should reject the ESB capacity mechanism proposal

21 September 2021 (IEEFA Australia): The Energy Security Board’s (ESB) proposal for consumers to pay conventional generators such as coal and gas an extra fee for their capacity, not just the actual power they produce, should be rejected by Energy Ministers at a forthcoming meeting this Friday argues a new report prepared by energy market […]

IEEFA Australia: ESB fails to deliver substantive progress on integration of distributed energy resources

IEEFA Australia: ESB fails to deliver substantive progress on integration of distributed energy resources

It's time to think big about small-scale DER

The Energy Security Board’s (ESB’s) final post-2025 market design advice to Energy Ministers has been very controversial. First there was the unnecessary proposal for a capacity payment paid by electricity consumers to power stations not just for the electricity they generate, but also for the size of capacity installed in the plant, irrespective of how […]

IEEFA Australia: Government cannot lower electricity bills by subsidising old and high cost power plants

IEEFA Australia: Government cannot lower electricity bills by subsidising old and high cost power plants

Refocusing attention on transmission and distribution of electricity will bring better results

27 August 2021 (IEEFA Australia): The Federal government can better achieve its ambition to lower electricity prices if it focuses on the transmission and distribution side of the energy market rather than the generation side, as its latest plan for keeping old coal plants open will in fact increase consumers’ electricity bills, not lower them, […]

IEEFA Australia: Hit to power bills from coal bail-out plan

IEEFA Australia: Hit to power bills from coal bail-out plan

Energy Security Board’s unnecessary $2.9 - $6.9 billion payment for power station capacity will come at a high cost to consumers

20 August 2021 (IEEFA Australia): Households may soon face a new charge on their power bills – potentially double that from the carbon price – if Energy Ministers agree to a proposal for a new capacity payment to power companies, according to a new report prepared by the Institute for Energy Economics and Financial Analysis […]

IEEFA U.S.: Energy transition to renewables likely to accelerate over next two to three years

IEEFA U.S.: Energy transition to renewables likely to accelerate over next two to three years

Coal, gas set to become biggest losers as renewable generation climbs quickly

March 31, 2021 (IEEFA) — The speed and scope of the energy transition to renewables will pick up pace over the next two to three years, according to the Institute for Energy Economics and Financial Analysis’ U.S. Power Sector Outlook 2021. Solar and battery storage adoption is enjoying almost exponential growth, and wind and solar […]

IEEFA U.S.: Wind surpassed coal as No. 1 fuel source in 2020 for Southwest Power Pool

IEEFA U.S.: Wind surpassed coal as No. 1 fuel source in 2020 for Southwest Power Pool

Wind energy growth due to geography, design factors, and new installations

February 11, 2021 (IEEFA) — Wind surpassed coal as the primary power generation source last year for the Southwest Power Pool (SPP), an independent grid operator that provides electricity for a vast territory stretching from the Texas Panhandle to the Canadian border. An analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) found […]

IEEFA: India’s new record-low solar power tariff demonstrates investor confidence despite the pandemic

IEEFA: India’s new record-low solar power tariff demonstrates investor confidence despite the pandemic

What drove the aggressive winning bid of Rs2/kWh ($0.027/kWh) in a recent solar PV auction?

India set a new record low tariff of Rs2/kWh ($0.027/kWh) in the recent Solar Energy Corporation of India (SECI) auction on 23 November 2020. The tariff based bidding was conducted for selection of solar power developers to set up 1,070 megawatts (MW) of grid-connected solar PV projects on a “build-own-operate” (BOO) basis in Rajasthan (Tranche-III). […]

IEEFA: Wind-solar hybrid systems can power India’s next wave of renewables growth

IEEFA: Wind-solar hybrid systems can power India’s next wave of renewables growth

Hybrid generation can produce consistent power at competitive tariffs

8 October 2020 (IEEFA) ‒ India’s total wind-solar hybrid capacity is expected to grow rapidly to reach nearly 11.7 gigawatts (GW) by 2023, according to a new report by IEEFA and JMK Research. “This is a new and fast-growing market in India,” say the report’s authors Vibhuti Garg, energy economist at the Institute for Energy […]

IEEFA U.S.: Investors in gas-fired projects in largest regional power system face substantial risks

IEEFA U.S.: Investors in gas-fired projects in largest regional power system face substantial risks

Eleven PJM projects under development may fail to prove financially viable

October 5, 2020 (IEEFA) — The landscape for developers of natural gas-fired power plants in the nation’s largest regional power system has shifted dramatically over the last decade, according to a joint study by the Applied Economics Clinic and the Institute for Energy Economics and Financial Analysis. The Pennsylvania-New Jersey-Maryland (PJM) system coordinates the flow […]

IEEFA: Pakistan’s new 27-year power plan risks locking in long-term overcapacity, leaving imported coal and LNG plants stranded

IEEFA: Pakistan’s new 27-year power plan risks locking in long-term overcapacity, leaving imported coal and LNG plants stranded

Wind and solar, the country’s cheapest source of new generation, also overlooked

3 September 2020 (IEEFA Pakistan): Pakistan risks locking itself into building more power capacity than it needs as a result of over-optimistic energy demand growth forecasts that do not take into account the impact of COVID-19, according to a new IEEFA report. Pakistan’s state-owned National Transmission and Despatch Company (NTDC) published its latest long-term power […]

More News and Commentary

IEEFA: Solar is the new ruler of the Indian electricity market

IEEFA: Solar is the new ruler of the Indian electricity market

Despite the pandemic, investor interest in India’s renewables market remains robust

The International Energy Agency’s (IEA) World Energy Outlook 2020 forecasts India to lead the recovery of global energy demand out of the COVID-19 pandemic for the coming decade. However, the IEA has downgraded its projection for the global energy demand growth rate to 9% from its pre-COVID forecast of 12% for the period 2019 to […]

November 12, 2020 Read More →
IEEFA: Wind-solar hybrid systems can power India’s next wave of renewables growth
, and

IEEFA: Wind-solar hybrid systems can power India’s next wave of renewables growth

Hybrid generation can produce consistent power at competitive tariffs

8 October 2020 (IEEFA) ‒ India’s total wind-solar hybrid capacity is expected to grow rapidly to reach nearly 11.7 gigawatts (GW) by 2023, according to a new report by IEEFA and JMK Research. “This is a new and fast-growing market in India,” say the report’s authors Vibhuti Garg, energy economist at the Institute for Energy […]

IEEFA U.S.: Investors in gas-fired projects in largest regional power system face substantial risks
, and

IEEFA U.S.: Investors in gas-fired projects in largest regional power system face substantial risks

Eleven PJM projects under development may fail to prove financially viable

October 5, 2020 (IEEFA) — The landscape for developers of natural gas-fired power plants in the nation’s largest regional power system has shifted dramatically over the last decade, according to a joint study by the Applied Economics Clinic and the Institute for Energy Economics and Financial Analysis. The Pennsylvania-New Jersey-Maryland (PJM) system coordinates the flow […]

IEEFA: Pakistan’s new 27-year power plan risks locking in long-term overcapacity, leaving imported coal and LNG plants stranded
and

IEEFA: Pakistan’s new 27-year power plan risks locking in long-term overcapacity, leaving imported coal and LNG plants stranded

Wind and solar, the country’s cheapest source of new generation, also overlooked

3 September 2020 (IEEFA Pakistan): Pakistan risks locking itself into building more power capacity than it needs as a result of over-optimistic energy demand growth forecasts that do not take into account the impact of COVID-19, according to a new IEEFA report. Pakistan’s state-owned National Transmission and Despatch Company (NTDC) published its latest long-term power […]

IEEFA report: New coal power plants locking Pakistan into too much supply and unsustainable capacity payments
and

IEEFA report: New coal power plants locking Pakistan into too much supply and unsustainable capacity payments

Sindh province demonstrates Pakistan’s renewable energy potential

26 June 2020 (IEEFA Pakistan) ‒ With electricity demand growth slowing even before COVID-19, Pakistan is faced with the increasing financial burden of power capacity payments and overcapacity risk at a time when renewables are the cheapest source of energy available, finds a new IEEFA report. Two more Chinese-financed coal-fired plants have reached financial close […]

S&P: Renewables offer better financial return in New England market than merchant gas plants

S&P Global Market Intelligence ($): The expected financial return on new renewable projects in ISO New England exceeds that of merchant natural gas projects, according to recent analysis from S&P Global Market Intelligence. New merchant natural gas projects in ISO-NE are affected by the ISO-NE Forward Capacity Auction. In February, the auction, known as FCA […]

March 9, 2020 Read More →

IEEFA U.K.: Suspension of £3.8 billion capacity market is an opportunity for re-think

Progress this week on British energy policy

LONDON—The European Court of Justice’s decision yesterday to suspend Britain’s capacity market creates an opportunity to focus on more cost-effective and forward-looking solutions for safeguarding the country’s energy-supply security. We’ve argued previously that Britain’s capacity market. which has served as a model for a similar scheme in Poland, provides subsidies that may no longer be […]

November 16, 2018 Read More →
IEEFA Report: Winners and Losers Among Big Utilities as Renewables Disrupt Markets Across Asia, Europe, the U.S., and Africa
, and

IEEFA Report: Winners and Losers Among Big Utilities as Renewables Disrupt Markets Across Asia, Europe, the U.S., and Africa

Leaders and Laggards Emerge; US$185 Billion in Lost Shareholder Value Seen Among Utilities Failing to Keep Pace; Solar and Wind Generation ‘Can Now Consistently Outbid Fossil-Fuel-Based Generation’

Oct. 4, 2017 (IEEFA) — The Institute for Energy Economics and Financial Analysis (IEEFA) published a report today that describes how the rise of renewable energy is disrupting electricity markets worldwide. The report, “Global Electricity Utilities in Transition: Leaders and Laggards: 11 Case Studies,” documents a pace of change in Asia, Europe, the Americas and […]

IEEFA Europe: Legal Challenge to Spain’s Capacity Market Payments Is Well-Founded

IEEFA Europe: Legal Challenge to Spain’s Capacity Market Payments Is Well-Founded

Spanish Environmental Groups Say Their Country is Violating European Commission Guidelines; Spain Should Retire Excess Capacity Before Paying Plants to Stay Online

A recent call by two environmental organizations for a formal state aid probe into Spain’s payments subsidizing gas- and coal-fired power plants appears to be well warranted, given multiple breaches of European state aid guidelines revealed by IEEFA in our December 2016 report, “Spain’s Capacity Market: Energy Security or Subsidy?” The Instituto Internacional de Derecho […]

July 14, 2017 Read More →
IEEFA U.K.: An Official Acknowledgement That Renewables and Better Cross-Border Interconnection Can Replace Coal-Fired Generation

IEEFA U.K.: An Official Acknowledgement That Renewables and Better Cross-Border Interconnection Can Replace Coal-Fired Generation

Latest Government Projections Undermine the Case for a Flagship Capacity Market That Subsidizes Conventional Generation

The U.K. government’s latest energy projections, out last week, show a grid dominated by renewables and electricity imports by 2025, exceeding the conventional generation presently supported by the country’s ratepayer-subsidized capacity market. This news comes on the heels of a report we published earlier this month on how interconnection with neighboring countries and renewable energy […]

March 24, 2017 Read More →