Van Der Burg Laurie and Whitley Shelagh

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This report introduces capacity mechanisms, a policy instrument for power markets, to a non-expert audience and considers their implications for meeting parallel objectives of security of supply and decarbonisation. It focuses on capacity mechanism developments in the EU and is directed at those who want to advance climate objectives, but who have a limited background in power markets. As a number of EU member states are moving ahead with the design and implementation of domestic Capacity mechanisms the European Commission has launched an investigation into these developments. Its findings will feed into its electricity market redesign proposals for the end of 2016. This is therefore a key moment to influence this process.