Capacity Certificate mechanism in Iran electricity market

  • 24 June 2023
  • 11:35
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Capacity Certificate mechanism in Iran electricity market

Majority of electricity market designers have decided to introduce mechanisms to ensure adequate Generation Capacity. In Iran electricity market, capacity payment and capacity certificate mechanism are used for generation expansion.

The main features of capacity certificate mechanism are:

  • Each new customer is required to purchase capacity certificate in proportion to its demand. Existing customers are also required to purchase capacity certificates if they want to increase their demand.
  • Investors will sell capacity certificates in proportion to new capacity they plan to add to the power system.
  •  Price of capacity certificate is determined on a supply-demand basis, and it provides an appropriate feedback to emit signal on the actions of investors and customers.
  • Possibility of selling capacity certificates by customers in proportion to their reduced demand will lead to the improved energy efficiency.


In the following figure, the price of the Capacity certificate is shown.


Website of Capacity certificate trading is:

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