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Installed
capacity (a.k.a. ICAP) requirements are a feature of the markets
operated by each of the three ISOs in the Northeast U. S. and are
under consideration for Ontario's market as well. The intent of these
requirements is to ensure that sufficient generation or
demand-response capability is developed so that all customers' needs
will be met reliably, even when demand is highest. But each of these
ISOs has experienced significant problems with its ICAP requirements
and the associated markets for ICAP to meet those requirements.
A diverse
group of experts discuss all the issues related to ICAP markets
including whether there is a need for these markets, who should be
eligible for participation, how these markets should operate, whether
the amount of capacity procured in these markets should vary in
response to the price at which it is offered, how trade between
different ICAP markets can be facilitated, what sort of revenue
assurances these markets would need to provide in order to induce
development of resources, and how these markets should accommodate
transmission constraints.
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- Are Installed Capacity Markets
Needed?
- Can acceptable levels of
reliability be maintained without explicitly requiring that a
certain minimum amount of capacity be in service?
- Can properly implemented energy
and ancillary services markets suffice to induce investment?
- Would the resulting revenue
streams be too volatile to support development?
- Should all Resources be Eligible
for Revenues from Installed Capacity Markets, or Should
Eligibility be Limited to New Sources of Capacity?
- Is it necessary to pay installed
capacity revenues to existing resources since there is no need to
induce them to build?
- Under what circumstances might
these payments be justified? Are there occasions when they would
not be justified?
- Should ISOs Operate Centralized
Auctions in which they Purchase all of the Capacity Needed to Meet
Installed Capacity Requirements?
- How would such centralized
auctions work?
- Is there a Need for an Installed
Capacity "Demand Curve, "such as that Implemented by the
New York ISO?
- What is the "demand
curve," and how does it differ from other approaches to
determining the amount of installed capacity that will be
purchased?
- What is Needed to Foster
Interregional Trade in Installed Capacity?
- Will it suffice to standardize the
obligations of installed capacity providers, the procedures for
determining how much installed capacity each can provide, and
timelines for the procurement of capacity?
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Michael
Cadwalader, Principal, LECG
Kenneth
Laughlin, Vice President - Market Services, PJM Interconnection
Mark
Karl, Manager-Market Design, ISO New England
Jason Chee-Aloy, Team Leader-Resource Adequacy (Market Evolution
Program), IMO
Mark Younger, Vice President, Slater Consulting
John
Chandley, Principal, LECG
Frank
Lacey, Director-Market Development, Strategic Energy
John
Charlton, Program Coordinator-Resource Adequacy, New York ISO
Thomas
Paynter, Principal Economist, New York State Department of Public
Service
Kevin
Jones, Principal, Navigant Consulting
Robert
Cary, President, Robert Cary & Associates
Thomas
Welch, Chairman, Maine Public Utility Commission
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