Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market
The Colombian government introduced a capacity market in order to promote the diversification in the energy matrix and protect users from high prices derived from dry seasonal events. Unfortunately, the flaws in the scarcity price definition- a mechanism that activates the capacity market obligation...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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EEEIC International Publishing
2016-12-01
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| Series: | Transactions on Environment and Electrical Engineering |
| Subjects: | |
| Online Access: | https://teee.eu/index.php/TEEE/article/view/77 |
| _version_ | 1819225451935039488 |
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| author | Emanuel J. Llanos-Perez Laura M. Hinestroza-Olascuaga |
| author_facet | Emanuel J. Llanos-Perez Laura M. Hinestroza-Olascuaga |
| author_sort | Emanuel J. Llanos-Perez |
| collection | DOAJ |
| description | The Colombian government introduced a capacity market in order to promote the diversification in the energy matrix and protect users from high prices derived from dry seasonal events. Unfortunately, the flaws in the scarcity price definition- a mechanism that activates the capacity market obligation and sets a cap price for the spot market- have led into a market failure. Specifically, some generation plants have been forced to be unavailable because their variable costs are significantly higher than the scarcity price. This paper presents a qualitative and quantitative analysis of the Colombian Electricity system, with a particular emphasis on the definition of the scarcity price. Results present lessons and recommendations for policy makers based on the experience of the Colombian Electricity Market, highlighting the need of a new definition of the scarcity price and a different focus on the energy planning scheme. |
| first_indexed | 2024-12-23T10:09:49Z |
| format | Article |
| id | doaj.art-e7f0df245ade4d268341eff553842d38 |
| institution | Directory Open Access Journal |
| issn | 2450-5730 |
| language | English |
| last_indexed | 2024-12-23T10:09:49Z |
| publishDate | 2016-12-01 |
| publisher | EEEIC International Publishing |
| record_format | Article |
| series | Transactions on Environment and Electrical Engineering |
| spelling | doaj.art-e7f0df245ade4d268341eff553842d382022-12-21T17:51:00ZengEEEIC International PublishingTransactions on Environment and Electrical Engineering2450-57302016-12-0121192610.22149/teee.v2i1.7739Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity marketEmanuel J. Llanos-Perez0Laura M. Hinestroza-Olascuaga1University College of LondonInstituto Superior Técnico, Technical University of LisbonThe Colombian government introduced a capacity market in order to promote the diversification in the energy matrix and protect users from high prices derived from dry seasonal events. Unfortunately, the flaws in the scarcity price definition- a mechanism that activates the capacity market obligation and sets a cap price for the spot market- have led into a market failure. Specifically, some generation plants have been forced to be unavailable because their variable costs are significantly higher than the scarcity price. This paper presents a qualitative and quantitative analysis of the Colombian Electricity system, with a particular emphasis on the definition of the scarcity price. Results present lessons and recommendations for policy makers based on the experience of the Colombian Electricity Market, highlighting the need of a new definition of the scarcity price and a different focus on the energy planning scheme.https://teee.eu/index.php/TEEE/article/view/77colombian energy systemenergy marketenergy planningspot market price |
| spellingShingle | Emanuel J. Llanos-Perez Laura M. Hinestroza-Olascuaga Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market Transactions on Environment and Electrical Engineering colombian energy system energy market energy planning spot market price |
| title | Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market |
| title_full | Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market |
| title_fullStr | Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market |
| title_full_unstemmed | Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market |
| title_short | Redefinition of the Scarcity Price: lessons and recommendations from the Colombian electricity market |
| title_sort | redefinition of the scarcity price lessons and recommendations from the colombian electricity market |
| topic | colombian energy system energy market energy planning spot market price |
| url | https://teee.eu/index.php/TEEE/article/view/77 |
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