Abstract
Abstract Due to the specifics of the product electricity and electricity markets, there are considerable doubts whether „energy-only-electricity-markets“ can guarantee a desired level of security of energy supply. If in peak load periods, the price inelastic demand exceeds the supply, there will be blackouts, in which the price mechanism fails in the short term. Underinvestment in generation capacity is the result. Politico-economic problems, like politically set price limits and high security standards as well as time inconsistency problems of government actions increase this problem substantially. With the „Versorgungssicherheitsverträgen“ the authors suggest a capacity mechanism, which solves the problems at hand without affecting the efficient power plant use on the spot market.
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