The expert reports commissioned by the Federal Ministry for Economic Affairs and Energy show that an electricity market is cheaper than an electricity market with an additional capacity market. The models for capacity markets that have been discussed in Germany would result in a higher level of electricity capacity and thus in unnecessary additional costs compared with the electricity market.
Furthermore, capacity markets are susceptible to design error. These errors can result in substantial costs. Errors in the design of the capacity market are almost unavoidable in reality. Also, capacity markets are extremely complex. They represent a greater intervention in the market.
The electricity market can provide the required capacities and the solutions to integrate renewable energy more cheaply. This requires undistorted competition of flexibility options, flexible generation capacities, flexible consumers and storage facilities. Therefore, impediments to flexibility on the electricity market are successively being removed.