removing regulatory distortions;

removing price caps in accordance with Article 10;

introducing a shortage pricing function for balancing energy as referred to in Article 44(3) of Regulation (EU) 2017/2195;

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enabling self-generation, energy storage, demand side measures and energy efficiency by adopting measures to eliminate any identified regulatory distortions;

ensuring cost-efficient and market-based procurement of balancing and ancillary servicesF11.

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not create undue market distortions F38...;

not go beyond what is necessary to address the adequacy concerns referred to in Article 20;

select capacity providers by means of a transparent, non-discriminatory and competitive process;

provide incentives for capacity providers to be available in times of expected system stress;

ensure that the remuneration is determined through the competitive process;

set out the technical conditions for the participation of capacity providers in advance of the selection process;

be open to participation of all resources that are capable of providing the required technical performance, including energy storage and demand side management;

apply appropriate penalties to capacity providers that are not available in times of system stress.

where a capacity mechanism has been designed as a strategic reserve, the resources thereof are to be dispatched only if the transmission system operators are likely to exhaust their balancing resources to establish an equilibrium between demand and supply;

during imbalance settlement periods where resources in the strategic reserve are dispatched, imbalances in the market are to be settled at least at the value of lost load or at a higher value than the intraday technical price limit as referred in Article 10(1), whichever is higher;

the output of the strategic reserve following dispatch is to be attributed to balance responsible parties through the imbalance settlement mechanism;

the resources taking part in the strategic reserve are not to receive remuneration from the wholesale electricity markets or from the balancing markets;

the resources in the strategic reserve are to be held outside the market for at least the duration of the contractual period.

be constructed so as to ensure that the price paid for availability automatically tends to zero when the level of capacity supplied is expected to be adequate to meet the level of capacity demanded;

remunerate the participating resources only for their availability and ensure that the remuneration does not affect decisions of the capacity provider on whether or not to generate;

ensure that capacity obligations are transferable between eligible capacity providers.

from 4 July 2019 at the latest, generation capacity that started commercial production on or after that date and that emits more than 550 g of CO₂ of fossil fuel origin per kWh of electricity shall not be committed or to receive payments or commitments for future payments under a capacity mechanism;

from 1 July 2025 at the latest, generation capacity that started commercial production before 4 July 2019 and that emits more than 550 g of CO₂ of fossil fuel origin per kWh of electricity and more than 350 kg CO₂ of fossil fuel origin on average per year per installed kWe shall not be committed or receive payments or commitments for future payments under a capacity mechanism.

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is based on appropriate central reference scenarios of projected demand and supply including an economic assessment of the likelihood of retirement, mothballing, new-build of generation assets and measures to reach energy efficiency and electricity interconnection targets and appropriate sensitivities on extreme weather events, hydrological conditions, wholesale prices and carbon price developments;

contains separate scenarios reflecting the differing likelihoods of the occurrence of resource adequacy concerns which F46a capacity mechanism is designed to address;

appropriately takes account of the contribution of all resources including existing and future possibilities for generation, energy storage, sectoral integration, demand response, and import and export and their contribution to flexible system operation;

anticipates the likely impact of the measures referred in Article 20(3);

includes variants without existing or planned capacity mechanisms and, where applicable, variants with such mechanisms;

is based on a market model using the flow-based approach, where applicable;

applies probabilistic calculations;

applies a single modelling tool;

includes at least the following indicators referred to in Article 25:

• ‘expected energy not served’, and

• ‘loss of load expectation’;

identifies the sources of possible resource adequacy concerns, in particular whether it is a network constraint, a resource constraint, or both;

takes into account real network development;

ensures that the national characteristics of generation, demand flexibility and energy storage, the availability of primary resources and the level of interconnection are properly taken into consideration.

make assumptions taking into account the particularities of national electricity demand and supply;

use tools and consistent recent data that are complementary to those used by the ENTSO for Electricity for the European resource adequacy assessment.