In mid-January, German State Secretary in the Ministry for Economic Affairs and Energy Rainer Baake spoke at a Handelsblatt conference about the future power market design. We need to get used to a few new terms, Craig Morris explains why. If you speak German, the video is available here. Below, I sum up the findings. First, the moderator says there is agreement that there is “surplus capacity” on the market, and Baake himself speaks of surplus capacity in Europe, not just Germany. This statement is important in light of the simultaneous concerns about a possible shortfall in generation capacity during the nuclear phaseout. It seems there is a middle ground that needs to be found – some capacity needs to be taken down, but there is a risk of too much disappearing in the process. Otherwise, the discussion focused on capacity markets, which both Industry Minister Sigmar Gabriel and Chancellor Angela Merkel publicly opposed last month. As I recently explained, the rollout of a capacity market may have been simply postponed, not canceled, and Baake’s comments … Continue reading Capacity reserve or strategic reserve?