EP.146 The Japanese Power Market with Aurora’s Leadership Team in Tokyo
Energy Unplugged by Aurora
The Future of the Capacity Market
In Japan, the capacity markets are structured to procure capacity four years in advance. There's a procurement target with a buffer and there's a price ceiling of 50% above the net cost of a new entrant. And so the new capacity market officially starts next April, but we have three years of auctions to look at. So how we reflect this model is that we solve for this capacity procurement target using a dynamic feedback loop. We co-optimize across revenue for the wholesale and capacity markets. The key objective of the capacity market is to achieve security of supply.
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