2015

Nuclear Capacity Auctions

Reprint No. 2015:41

Author(s): Sven-Olof Fridolfsson and Thomas TangeråsYear: 2015 Title: Energy Journal Volume (No.): 36 (3) Pages: 247–261
Online article (restrictions may apply)
Preliminary version


We propose nuclear capacity auctions as a means to correcting the incentives for investing in nuclear power. In particular, capacity auctions open the market for large-scale entry by outside firms. Requiring licensees to sell a share of capacity as virtual power plant contracts increases auction efficiency by mitigating incumbent producers' incentive to bid for market power. A motivating example is Sweden's policy reversal to allow new nuclear power to replace old reactors.


Reference:
Fridolfsson, Sven-Olof and Thomas Tangerås (2015), "Nuclear Capacity Auctions". Energy Journal 36(3), 247–261.

Thomas Tangerås

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