Electricity Market Design Report

This report provides a comprehensive assessment of the current performance of wholesale electricity markets and their related policy mechanisms. It addresses how these markets are adapting to changes in supply and demand, focusing on the challenges posed by increased shares of variable generation and decentralization. The analysis reflects on the reliability and efficiency of short-term markets, which have continued to function effectively despite rising system complexity. In contrast, medium- and long-term markets encounter ongoing issues with liquidity and accessibility, complicating risk management and investment confidence for participants. The report further discusses the role of complementary mechanisms that assist in achieving resource adequacy and decarbonization goals, stressing that their effectiveness relies on designs that align with market signals. The document concludes with recommendations aimed at policy makers, emphasizing the need for coherent evolution across market structures to maintain resilient and affordable electricity systems amid changing operational conditions.