Former generation capacity expansion models were formulated as optimization problems. Theseincluded a reliability criterion and hence guaranteed security of supply. The situation is differentin restructured markets where investments need to be incentivised by the margin resulting fromelectricity...

In this paper we address the issue of finding efficient partial equilibria in markets with nonconvexities.This is a problem that has intrigued generation of economists. Beside its theoreticalimportance this issue is fundamental in energy markets which do not give the right price signalsand...