[E&E seminars] WED - 'Getting Enough Money to Get Something Built, The NE Forward Capacity Market' (Dec. 6)

[Karen Gibson]

LFEE Seminar on Energy and Environment
Sponsored by the MIT Laboratory for Energy and the Environment


“Getting Enough Money to Get Something Built”

The New England Forward Capacity Market:
Necessary, but not necessarily sufficient

Dr. Raymond Cox
President and Principal of Mosaic Energy Insights

Wednesday
December 6, 2006
12:00 - 1:30 pm
E40-496


Competitive electricity markets, especially in the US, are  
characterized by high volatility in spot energy prices.  Political  
responses to high volatility (particularly energy price caps) limit  
the net revenues for any generator from spot energy sales.  These  
limits have dampened investor interest in new generating facilities  
in many regions, which may jeopardize reliability.  In turn, market  
administrators have turned to capacity markets – market for a call  
option on energy – to provide more stable revenues for new generation  
investments and thus attract needed investment.

This talk will consider

Fundamental volatility in electrical energy spot prices within  
competitive electricity markets;
Political and investor response to price volatility;
The “missing money” for generators – how exit barriers and socialized  
reliability limit investor interest in the absence of markets for  
reliability products;
Market structures to provide the missing money (including capacity  
markets);
Linkages between engineering reliability criteria and capacity markets;
New England’s capacity markets – historical and future; and
Key features and challenges of the forthcoming “Forward Capacity  
Market” in New England.




Bring your lunch - light refreshment will be provided.


___________________________________________________

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please contact Karen Gibson, kgibson at mit.edu



Karen  L. Gibson
Program Assistant
MIT Laboratory For Energy and the Environment
77 Massachusetts Avenue, E40-469
(1 Amherst St., E40-469 - for DHL and FedEx)
Cambridge, MA 02139  USA
Tel:  1 (617) 258-6368; Fax:  1 (617) 258-6590

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