Countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, FYR Macedonia, Romania, Serbia and Montenegro
This study has been commissioned by the World Bank and is intended to assist the member states of the South East Europe Regional Electricity Market to attract investment into their electricity systems. The region of South East Europe (SEE) is characterized by a number of electricity markets in various stages of early development.
Electric markets in other parts of the world have already been restructured, but are still struggling to find a method of ensuring supply adequacy and protection against undue price volatility. The sources of this concern vary throughout the world, and include retail prices set by governments far below the cost of new entry, and the need to compensate for politically imposed price caps in energy markets.
A key concern in the context of SEE is that a market for electrical energy – by itself – might not provide for sufficient assurance of security of supply. This report investigates alternative investment support mechanisms, called capacity schemes, which might be potentially useful in providing incentives for sustained capacity balance in the South East Europe context. The report provides an overview of conditions in the electricity markets of South East Europe and then considers the different ways in which electricity markets encourage investment in capacity. The report outlines a path from establishing basic preconditions, through central procurement of capacity via PPAs, to a capacity obligations scheme.
Full text of the study:
Volume 1 (PDF, 403 KB)
Volume 2 (PDF, 336 KB)
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