ECONOMIC CONSEQUENCES OF THE CAPACITY MARKET IMPLEMENTATION: THE CASE OF POLAND

摘要

The capacity market is a remuneration mechanism aimed to provide better investment incentives in order toensure generation adequacy that has been recently implemented in Poland. As in the energy-only-market powerproducers do not receive sufficient incentives, this mechanism aims to encourage investments. Due to the increasein the market share of renewables the economic standing of conventional power units are getting worse. As aresult, the missing money problem arises (Cramton and Stoft, 2006; Joskow, 2006; Cramton et al., 2013).Consequently, conventional power plants operating in Poland do not generate sufficient revenues to coveroperating and capital costs. This leads to a reduction in the level of installed capacity in the domestic powergeneration system and, at the same time, causes an increase in the risk of the lack of an appropriate level ofreserve margin. Because power units do not have sufficient financial resources, they do not modernize existing orbuild new units, what can lead to the missing capacity problem. Moreover, this issue is getting more serious due tothe withdrawal of subsequent existing units from the domestic power generation system. The missing capacityproblem is not a new phenomenon in Europe and in the world. As a result, there are several countries or regionsthat have introduced such solutions. The most known examples of capacity markets are those operating in theUnited States: the New York Independent System Operator, the Pennsylvania New Jersey MarylandInterconnection, the Independent System Operator – New England, the Midcontinent Independent SystemOperator (Bowring, 2013; Spees et al. 2013) and in the UK.