An electricity market model with generation capacity expansion under uncertainty

This article presents an electricity dispatch model with endogenous electricity generation capacity expansion for Germany over the horizon 2010-2035. The target is to quantify how fuel and carbon price risk impacts investment incentives of thermal power plants. Results point to findings which are in line with general theory: Accounting for stochasticity increases investment levels overall and the investment portfolio tends to be more diverse. -- electricity market ; equilibrium model ; generation expansion ; uncertainty ; market power