1min snip

Public Power Underground cover image

Resource Adequacy, Tail Risk, and Institutional Capability

Public Power Underground

NOTE

Analyzing Risks and Decentralized Approach in Capacity Markets

Analyzing risks in capacity markets involves a decentralized approach that allows participants to assess risks from various perspectives, fostering innovation. In capacity markets, the existence of a high risk premium for fossil fuel generators offering long-term forward contracts highlights the risk allocation challenge. The risk of uncertain fuel prices is transferred to the capacity product in markets with low price caps, impacting the prices in the capacity market. Despite the risk being present, its distribution across all consumers in the capacity market reflects a socialized approach, raising interesting questions about risk allocation.

00:00

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.
App store bannerPlay store banner

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode