Ensuring an adequate, long-term energy supply is a paramount concern in Europe. The security of a country's energy supply must be guaranteed, and within the EU individual member states are acting in order to safe-guard future energy production. Governments now intervene by encouraging
investment in generation capacity, offering an additional revenue stream for conventional power plants in addition to the existing, heavily subsidized investments in renewable energy sources.

These capacity remuneration mechanisms (or simply capacity mechanisms) have become a hot topic in the wider European regulatory debate. European electricity markets are increasingly interconnected, so the introduction of a capacity mechanism in one country not only distorts its national market but
may have unforeseeable consequences for neighboring electricity markets. If these mechanisms are adopted by several member states with no supra-national coordination and no consideration for their cross-border impact, they may cause serious market distortions and put the future of the European
internal electricity market at risk.

These national developments are giving great cause for concern, and without a clear understanding of capacity mechanisms and their potential consequences it is difficult to predict the impact these measures will have on the internal European electricity market. This book provides readers with a
thorough explanation and analysis of capacity mechanisms, written by an expert team of policy-makers, economists, and legal professionals. It will be a first point of reference for regulators and policy-makers responsible for designing optimal capacity mechanisms in Europe, and will be an
invaluable resource for academics and practitioners in the fields of energy, regulation, and competition.

Part I: Policy 1. EU Policy on Capacity Mechanisms, Francisco Enrique Gonzalez-Diaz 2. The Regulators' View: ACER's Report on Capacity Mechanisms and the EU Internal Electricity Market, Alberto Pototschnig and Martin Godfried 3. Capacity Mechanisms in the European Market: Now, but How?, Arthur Henriot and Jean-Michel Glachant Part II: Economics 4. Energy Market Design with Capacity Mechanisms, Jens Perner and Christoph Riechmann 5. Different Approaches for Capacity Mechanisms in Europe: Rationale and Potential for Coordination?, Fabien Roques and Charles Verhaeghe 6. Capacity Mechanisms and Cross-Border Participation: The EU Integrated Approach in Question, Dominique Finon 7. The System Adequacy Problem: Lessons Learned from the American Continent, Carlos Batlle, Paolo Mastropietro, Pablo Rodilla, and Jose Ignacio Perez-Arriaga 8. The Generation Mix, Price Caps, and Capacity Payments, Bert Willems Part III: Law 9. Capacity Mechanisms and State Aid Control: A European Solution to the 'Missing Money' Problem?, Leigh Hancher 10. Antitrust Law: A Missing Piece in a Regulatory Puzzle?, Adrien de Hauteclocque and Malgorzata Sadowska 11. Free Movement of Goods in the Labyrinth of Energy Policy and Capacity Mechanisms, Peter Oliver Part IV: Case Studies 12. Austria, Thomas Starlinger and Harald Kropfl 13. Belgium, Wim Vandenberghe and Rene Gonne 14. France, Daniel Crevel-Sander and Charlotte Beaugonin 15. Germany, Kai Uwe Pritzsche and Katharina Reinhardt 16. Greece, Antonis Metaxas 17. Italy, Francesco Maria Salerno 18. Netherlands, Marinus Winters 19. Norway, Jens Naas-Bibow and Catherine Ramstad Wenger 20. Poland, Malgorzata Sadowska 21. Spain, Inigo del Guayo 22. United Kingdom, Peter Willis