The European energy transition is rapidly reducing the role of fossil-based generation, raising concerns about system adequacy and the financial sustainability of dispatchable plants. Combined Cycle Gas Turbines (CCGTs) remain essential to ensure grid flexibility and security of supply, particularly in markets with high renewable penetration such as Portugal. This paper applies the European Union’s adequacy assessment methodology to compute the Cost of New Entry (CONE) and the Cost of Renewal or Prolongation (CORP) for CCGTs, establishing the minimum annual revenues required for new investments and for extending the lifetime of existing units. A simplified market closure algorithm is developed using 2023 MIBEL data to estimate CCGT revenues under current conditions. Results show that annual market revenues (about 20 k€/MW) are far below the calculated thresholds of 123 k€/MW for CONE and 39 k€/MW for CORP, revealing a substantial investment gap. These results suggest the need for capacity remuneration mechanisms (CRMs) to maintain existing plants and attract new capacity. Indicative values of about 103 k€/MW/year for new entrants and about 20 k€/MW/year for renewals are obtained, which should be interpreted as order-of-magnitude estimates rather than direct payment levels for market implementation. The findings highlight the critical role of CRMs in guaranteeing energy security during the decarbonization process and provide policy-relevant benchmarks for Portugal and other EU countries facing similar challenges.
Gaspar et al. (Thu,) studied this question.