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Policy & Regulation

Counting the cost of Europe’s capacity payments

European countries are increasingly paying out subsidies to conventional power plants, including in nations where supply shortages do not look likely to be an issue in the short or medium term European countries are increasingly paying out subsidies to conventional power plants, including in nations where supply shortages do not look likely to be an issue in the short or medium term.
By Andreas Walstad 12 November 2019 Europe & Russia / Policy & Regulation 0 34781
The Datteln 4 coal-fired power plant in northwest Germany. (E.On)

European countries paid a total of €2.5 billion ($2.8 billion) in capacity payments to power plant operators in 2018, according to a report published on Monday by the Agency for the Cooperation of Energy Regulators (ACER). The Ljubljana-based agency said this was a 7% increase year on year and that the payments – which are funded usually by end-users – were expected to increase in the coming years as more countries implement auction-based systems.

Capacity payments are subsidies paid to gas-fired, nuclear and...