DOI: 10.24251/hicss.2018.326
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Abstract: AbstractThis paper surveys the development of marginal cost theories used in the optimal allocation of scarce resources, and examines the application of these theories to current-day electricity capacity markets. The different approaches in use today to ensure grid reliability and incentivize new resources are examined. Market challenges are surveyed, as well as empirical findings that suggest that current market approaches do not provide proper incentives. We conclude that the so-called "missing money" is no…

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