Dr Fernando Barrera of Frontier Economics presented today at the European Energy Law Conference, a joint initiative between the Florence School of Regulation and the Hellenic Energy Regulation Institute. Dr Barrera spoke about the challenges that new Capacity Remuneration Mechanisms (CRM) face in European power markets, pointing out that CRMs should not interfere with European market integration or stifle the market-driven demand responses that new technologies and retail liberalisation are providing.
Dr Barrera concluded that CRMs should be thought of as a transitory mechanism that may not be necessary when proper Demand Side Response is in place. CRMS should therefore be designed such that no ‘stranded costs’ arise from their introduction.
Frontier is advising the Hellenic Energy Regulator (RAE) on the design of a CRM. RAE is now consulting on the permanent CRM for the Hellenic Power Market.
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