Short-term resource adequacy in electricity market design

Pablo A. Ruiz, George Gross

Research output: Contribution to journalArticlepeer-review


Short-term resource adequacy is the ability of a system with a set of given resources to meet the load over the short term. In the aftermath of the 2000-2001 California crisis, the consideration of resource adequacy in market design became critically important. Various capacity approaches, such as requirements, payments, and subscriptions, have been proposed to ensure resource adequacy in electricity markets. We focus on short-term resource adequacy design and analysis within the context of making effective use of competition in electricity markets. We propose a design of a short-term resource adequacy program based on capacity requirements expressed in terms of a price-sensitive demand curve. The program gives incentives for providing capacity to markets and metes out penalties for nonperformance situations. The probabilistic modeling of the uncertainty in the generation availability and in the load allows the evaluation of reliability in terms of widely-used metrics. The analysis of the proposed design and the simulation of a simple implementation on different sized test systems show that the program results in improved reliability. These studies indicate that the total system costs may be minimized when key program parameters are appropriately chosen. The proposed design provides a meaningful linkage between reliability and markets and constitutes a contribution to the electricity market design.

Original languageEnglish (US)
Pages (from-to)916-926
Number of pages11
JournalIEEE Transactions on Power Systems
Issue number3
StatePublished - 2008


  • Capacity payments
  • Capacity requirements
  • Capacity withholding
  • Electricity markets
  • Incentives
  • Market power
  • Reliability
  • Reliability economics
  • Resource adequacy
  • Strategic behavior

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering


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