Resource Adequacy Alternate Perspectives and Divergent Paths

Ensuring that deregulated wholesale markets meet resource adequacy targets has been a concern of policymakers for more than a decade. This chapter reviews the difficult and controversial evolution of capacity resource adequacy mechanisms in the United States. Next, the alternative used in Texas is examined: an energy-only resource adequacy mechanism based on the successful Australian model. The necessary conditions for a sustainable energy-only approach and a potential transition mechanism to an energy-only approach are also discussed. While electric industry restructuring has been increasingly refined across the world for about 15 years, there is still a significant debate on whether direct capacity remu-neration should be an integral part of competitive wholesale electricity markets. This chapter will address this question. The authors present a selected historical account o