Expert support in the further development of the national design of Germany's electricity market with a view to funding controllable capacities

With the rapidly increasing importance of electricity generation based on v ariable renewable energies, the expectation of a growing electricity demand due to the increasing coupling of the electricity system with other demand sectors and the coal phase-out, the provision of a sufficient level of controllable generation capacity and demand flexibility is becoming the focus of political interest. In particular, the question of whether the existing electricity market design provides sufficient incentives for investing in new, controllable power generation capacities, especially in view of existing uncertainties, is being discussed.

At the beginning of February 2024, the German government also agreed to introduce a capacity mechanism as part of the agreement on the power plant strategy. Capacity mechanisms can be introduced either by implementing an explicit capacity market or by strengthening the capacity incentives in the competitive electricity market. The aim of this service contract is to further develop and elaborate the various options for implementing a capacity mechanism in Germany. Based on an ideal-typical design, the aim is to develop real design variants and hybrid models.