A Marginal Reliability Impact Based Accreditation Framework for Capacity Markets
This paper presents a Marginal Reliability Impact (MRI) based resource accreditation framework for capacity market design. Under this framework, a resource is accredited based on its marginal impact on system reliability, thus aligning the resource accreditation value with its reliability contribution. A key feature of the MRI based accreditation is that the accredited capacities supplied by different resources to the capacity market are substitutable in reliability contribution, a desired feature of homogeneous products. Moreover, with MRI based capacity demand, substitutability between supply and demand for capacity is also achieved. As a result, a capacity market with the MRI based capacity product can better characterize the underlying resource adequacy problem and lead to more efficient market outcomes.