A market which is lacking sufficient revenues from the sale of energy and ancillary services for financing the construction of a new generating unit. In this situation, reserves will decrease and the probability of non-supply will increase (the availability price in the market should go up in this case).

-The entry of renewable energies and decommissioning of polluting units contributes to the missing money phenomenon.

-The funding of capacity payments which should prevent a missing money scenario is imposed on the consumers/suppliers.

– The entry of renewable energies at a zero marginal cost reduces the number of hours of high marginal costs in the grid (reduction of peaks) and lowers the profitability in energy markets, as well as the number of hours during which the probability of non-supply is high.

-Missing money does not reflect the lack of commercial success of any power station but the lack of economic feasibility for adding new capacity to the grid.

Gina Cohen
Natural Gas Expert