Economic assessment of several options to provide a safety net for electricity production. How to form the public role in supply security without disturbing the market?

This study provides an economic assessment of several options to provide a safety net for electricity production. The safety net is aimed at preventing black-outs, without disturbing the electricity market. Our analysis suggests that only if the safety net is placed outside the regular market, sufficient security is provided. In this case, the transmission system operator only deploys the safety net after all other options are exhausted and the next alternative would be to disconnect groups of users. By taking the capacity out of the market, prices increase, inducing new investments. When implementing the safety net, one should take into account the trade-off between certainty for investors and the flexibility of the instrument