Cooperation and Funding: German Federal Environmental Agency

Security of supply is a potential challenge in an energy system with high shares of renewable energy sources. Furthermore, with a lifetime of more than 30 years, most new power plant projects currently discussed will still be in operation in the year2050. Hence, new investments on the supply side are vital but will only happen optimally when incentives are rightly set. The project investigates the necessity of short-, medium- and long-term changes of the regulatory framework in the German market. One focus in the project is the examination of capacity instruments (capacity market or strategic reserve) to create investment incentives for fossil power plants. In particular, the project compared their respective advantages and disadvantages.