A capacity mechanism design for distribution network expansion planning

Capacity remuneration mechanisms have been originally oriented to ensure availability and continuity of supply on the power generation pool. Equivalent generation-based capacity mechanisms could be implemented to enhance and prolong the usability of the distribution grid. In particular, such capacity mechanisms would provide an alternative to traditional expansion options leading to investment deferral. In this work, a distribution capacity mechanism to fit within a distribution network planning methodology will be proposed and discussed. The capacity mechanism will be outlined following similar guidelines as for the design of capacity mechanisms used in the energy only market. The result of the design is a volume based capacity auction for a capacity-constrained system, oriented to both the active and the reactive power provision.