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Energies 2015, 8(6), 5198-5216; doi:10.3390/en8065198

Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union

Potsdam Institute for Climate Impact Research (PIK), Research Domain IV—Transdisciplinary Concepts & Methods, Telegrafenberg A31, 14473 Potsdam, Germany
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Academic Editors: Vincenzo Dovì and Antonella Battaglini
Received: 20 April 2015 / Revised: 26 May 2015 / Accepted: 28 May 2015 / Published: 3 June 2015
(This article belongs to the Special Issue Energy Policy and Climate Change)
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Abstract

The European Union and its Member States are seeking to decarbonize their energy systems, including the electricity sector and, at the same time, pursue market integration. However, renewable energy (RE) deployment and the liberalization of the energy-only market have raised concerns at the national level about the security of electricity supplies in the future. Some actors consider the lack of sufficient investments in generation capacities a threat to supply security. As a consequence, it was proposed that capacity markets solve these problems. The underlying assumption is that the market design is the only determining factor for investments in security of supply options. In this article, we question this narrow view and identify further determinants of the investment decisions of electricity market participants. Based on the insights of institutional sociology and economics, we understand the market to be a social institution that structures the behavioural expectations of market participants. Derived from the theoretical conceptualization and based on qualitative literature review and own work, we find four determinants for investment behaviour beyond the formal market design: Material opportunities, strategic actor behavior and identity, focusing events and discursive expectations about the future. With this perspective, we discuss the introduction of a European Energy Union as a possible tool that might have a great impact on the more informal determinants such as expectations about the future and the construction of a European energy narrative. View Full-Text
Keywords: electricity market; investments; social institution; European Energy Union; security of supply; capacity markets electricity market; investments; social institution; European Energy Union; security of supply; capacity markets
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Ellenbeck, S.; Beneking, A.; Ceglarz, A.; Schmidt, P.; Battaglini, A. Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union. Energies 2015, 8, 5198-5216.

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