Contribution to the consultation on generation adequacy, capacity mechanisms and the internal market in electricity

The transformation of the German and European energy systems to ones based on renewable energies requires not only new technologies with constantly low costs, but also a change of the power markets. For the integration of renewable energies and to ensure the security of supply for the upcoming transitional phase, the current power market is no longer appropriate. 15 years after liberalization began and with a view to the ambitious targets to reduce greenhouse gas emissions and expand renewable energies, the electricity market must be significantly changed. However, in the context of the European internal energy market, this new market design has not only a national but also a European dimension. Against the background of the diverse issues and challenges involved, the European Commission carried out a consultation procedure on “Generation Adequacy, Capacity Mechanisms and the Internal Market in Electricity”. Öko-Institut (Institute for Applied Ecology) has provided detailed comments on very diverse issues in this consultation process. This consultation paper addresses issues relating to the necessity for new market elements (“capacity markets”), to the design of such rules and to their integration in the European framework.