Volume One: Investment Incentives for the South Eastern Europe Regional Electricity Market
24 June 2005
By Graham Shuttleworth
In this report commissioned by the International Finance Corporation, NERA Director Graham Shuttleworth examines options for encouraging investment in new electricity generation capacity over the next five years to ten years, as South Eastern Europe (SEE) moves toward integration of electricity markets.
This volume of the report reviewed a number of incentive schemes that would encourage long-term, private sector investment in the region based upon a range of criteria including security of supply, cost efficiency, competition, transparency, price stability, non-susceptibility of gaming, and fairness. The mechanisms reviewed are the use of Power Purchase Agreements (PPAs), energy-only markets, and a variety of explicit capacity schemes, i.e. payments, obligations and hybrid schemes. The report also considers the importance of the creditworthiness of the industry as a whole on securing investment. In conclusion, the report outlines the seven steps necessary for the SEE market to move towards a harmonized, though not necessarily common, system of capacity obligations.
To read volume two of this report, please refer to the link located in the right-hand column of this page.
