Evaluation of Capacity Markets in the Political Dimension of the Full Potential Energy Resources Methodology

The objective of this paper is to evaluate the degree of acceptability of the capacity market in partially open power markets. To this end, a case study is used in the newly created Brazilian capacity market, evaluating the political dimension of the methodology for Determination of the Complete Potential of Energy Resources (DPC-RE). The ever-increasing share of intermittent renewable sources, mostly solar photovoltaic and wind, very focused on the decarbonization of the global electricity sector, has generated a situation known as missing money in purely energy markets. The practical effect of this situation is that thermal plants are not paid accordingly to the attribute they have in power systems (capacity). Several power markets, to address this missing money situation, have adopted capacity mechanisms. In this sense, the participation of thermal plants, which use natural gas as fuel, is of fundamental importance, also anchored in the energy transition.