Institutions & Markets
Markets
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Electricity markets coordinate investment, dispatch, and system services across multiple timescales. Their design shapes which resources participate and who bears risk.
Why this matters
[To be drafted]
Shared definitions
Electricity markets are institutional arrangements through which the production, delivery, and ancillary services of the electricity system are coordinated via price signals and contractual obligations. Markets operate across multiple timescales — from long-term capacity investment decisions through to real-time balancing — and different market segments address different functions within the overall system.
Cerqueira, Belhomme et al. (2016) describe the market and service layers of the electricity system across four temporal horizons: long-term investment and capacity mechanisms; medium-term management of uncertainties and risks with existing assets; short-term generation-consumption balance; and post-delivery settlement.1)
Figure 1. The market and service layers timeline.
Source: Cerqueira, Belhomme et al. (2016). Note: more recent versions of this framework may exist — see topic notes.2)
The same authors identify the main issues under discussion in market design, spanning generation mix, networks, system security, resilience, demand, ICT, storage, multi-energy systems, and the strategies and policies coordinating them.
Figure 2. Examples of the main issues under discussion in electricity market design.
Source: Cerqueira, Belhomme et al. (2016).3)
Perspectives
Actors and stakeholders
Technologies and infrastructure
Institutional structures
The EU revised its internal electricity market design through a 2023 proposal amending the Electricity Regulation, the Electricity Directive, and the REMIT Regulation. The revision aims to decouple electricity bills from short-term fossil fuel price volatility by incentivising longer-term contracts, expanding power purchase agreements, and requiring two-way contracts for difference for new publicly supported low-carbon generation investments. It also seeks to improve consumer contract choice and direct access to renewable energy.4)
Distinctions and overlaps
Related topics
Topic notes
Content notes from source material:
- The two CIGRE figures may have more recent versions — the original note in the source flags this. The CIGRE 2016 paper is conference proceedings without an open-access URL; cite bibliographically only until a stable URL is confirmed.
- Merge flag for role model: no current wiki page — likely belongs here or in Actors and roles.
- Network codes cross-reference flagged in source — handled via related topics.
- The EU market design section contains substantive institutional content that belongs in the institutional structures perspective rather than in shared definitions — moved there as a starting point for development.
- Page owner: Klaus Kubeczko.