Comillas Pontifical University. Madrid (Spain)
January 23rd, 2026
Summary:
Capacity Remuneration Mechanisms (CRMs) have become a key regulatory instrument in modern power systems, through which regulators aim to achieve a desired level of resource adequacy. However, the ongoing energy transition is reshaping the resource adequacy problem and the solutions to address it. This PhD dissertation focuses on revising several CRM design elements in this context, specifically resource adequacy metrics, the methodology for calculating firm supply, and the alternatives for enabling demand resource participation. The conclusions of this PhD thesis for each of these topics can be summarised as follows. • In the context of the energy transition and increasing demand elasticity, widespread metrics such as the Loss-of-Load Expectation are becoming obsolete as they cannot capture the severity of each event. In order to capture these differences, resource adequacy metrics must incorporate the price dimension. Additionally, in light of the increase in extreme weather conditions due to climate change, it would be advisable for resource adequacy metrics to focus on extreme scenarios using statistical measures such as the Conditional Value at Risk (CVaR) rather than treating all events equally. However, regulators may still perceive that a single metric cannot capture all facets of potential scarcity conditions. In this case, multiple resource adequacy metrics could be used simultaneously, although this would complicate the process of calculating firm supply. As an alternative, a composite resource adequacy metric could be used. • Firm supply recognises how different resources can contribute to overcoming scarcity conditions in a system. Current firm supply calculation methodologies are becoming inadequate and are being reformed in many power systems. This thesis presents several general recommendations on how firm supply should be calculated in modern CRMs, which are focused on the marginal impact of resources as part of the future operation of the system on its adequacy levels. Due to the forward-looking nature of the firm supply calculation process, the effect of the CRM itself on the resource mix must be considered. The firm supply of resources could differ significantly from expectations if the resource mix differs substantially from the initial estimate, caused precisely by the firm supply values estimated initially. • The rising concern for resource adequacy in power systems, coupled with the growing importance of CRMs in electricity market design, has made it increasingly necessary to incorporate demand resources more effectively. CRM costs should be assigned according to each consumer's marginal impact on the system's resource adequacy. This thesis proposes that this can be done by using hourly charges that can then be multiplied by consumers’ historical consumption. However, integrating demand resources into CRMs is challenging because they demand firm supply and offer it back to the system as demand response. This thesis details the various alternatives for integrating demand response for both implicit and explicit participation, and some of the issues that can arise with these alternatives.
Descriptors: Economic Sciences, Industrial organization and public policy, Market structure
Citation:
P. Brito-Pereira, "Future-proof Design of Capacity Mechanisms during the Energy Transition Reliability Metrics, Firm Supply Calculation", PhD. dissertation, Comillas Pontifical University, Madrid, Spain, 2026.
