The price of capacity: unknowns and equations

The capacity market à la française is a complicated creation: the NOME [New Organisation of the Market for Electricity] law in 2010, a decree in 2012, two decisions in 2015 and 2016. The capacity market à la française is a cumbersome, 209-page-long body of rules (available in French only, because it’s probably very difficult to translate into another language). The capacity market à la française is also about change: a new decree, a new decision, and therefore a new, longer edition of the rules are expected in 2018.

On the other hand, one clear point seems to be emerging from this regulatory cabaret: the price of capacity!

The sole capacity auction in 2016 was framed by limited, simple parameters:

  • Minimum volume up for sale: 25% of EDF’s certified capacities
  • A maximum price:  set at €20,000/MW
  • And therefore an auction result that sets the market reference price: at 10,000€/MW

A comprehensible and quite logical equation  seems to be emerging (where AL refers to the supply year):


In 2018, this algebra will quickly become complicated…

We won’t dwell on the auction of 27 April 2017 for the 2017 supply year which, with only 500 MW exchanged, had the virtue of confirming the price of the 15 December 2016 auction.

2018 supply year: things are becoming complicated with 2 auctions, on 9 November and 14 December. Astonishing! Not only is the capacity value not reaching 15,000€/MW ; the price is even (slightly) down! Fortunately, some consistency is emerging from these auctions, which seem to be a copy-paste of both the price (~€9,350/MW) and the volume (~11GW each; in total, on the same order of magnitude as the volumes exchanged in 2016).

This consistency therefore naturally leads us to revise our linear regression calculations which tell us (without going into the details or the level of sophistication of our calculations):

PrmAL=CoûtCapaNucléaireAL [PrmAL = CostNuclearCapaAL]

2019 supply year: the situation becomes even more complicated, to a significant extent

  • We didn’t yet have the results of the second auction for AL2018 with its beautiful consistency before the AL2019 auction (simultaneous auctions scheduled for 14 December)
  • For the only auction in 2017, the minimum volume up for sale had to be: [Max(25% of EDF certified capacities,50% of EDF available capacities]
  • 4 other auctions planned in 2018 for AL2019, of which the first 3 have no requirements regarding volumes for sale (and still none regarding purchases)
  • An uncertain competitiveness for the ARENH – with a market price around €41/MWh, the ARENH should be competitive over the year, very competitive in the first half, but possibly not in the second half – which makes the supply-demand balances regarding capacity for the key players just as uncertain

The somewhat disconcerting results of this auction clearly reflect the complexity of its parameters:

  • A generous offering: over 40GW
  • Extremely weak demand: less than 1GW market order (€40,000/MW), reflecting a certain disenchantment on the part of the suppliers. This may become a subject of concern for the proper functioning of the mechanism
  • Very low volumes being exchanged: 1,220.20MW
  • A discernible rise in the capacity price (€12,999.80/MW) without quite matching the price offered for nuclear capacity (which we strongly suspect to be around €15,185/MW)

Beyond a few concerns regarding the proper functioning of the market (certain disenchantment in terms of demand), we have to acknowledge that the number of parameters and unknowns surrounding the capacity market exceeds our ambition for finding the martingale that governs this market. One constant emerges, however: the French electricity sector is still very much dominated by nuclear generation, and will remain so until at least 2030-2035, with a share of over 50%. It is therefore logical that the cost of this production be clearly reflected in the price and in electricity, a price which is itself indeed made up of an energy component AND a capacity component.

Philippe Boulanger

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Profesional Experience & Education

Diego graduated in Political Economy at King’s College University (London – 2021). He started his professional career in a family business in Madrid as an operations manager. Diego then studied a Master in Management and Master in Computer Science at IE University (Madrid – 2022), during which he participated as an Information Technology (IT) intern in a startup. In May 2023, Diego joined the HES team as an intern specialised in programming models. In his first project, he developed a software tool for modelling the unavailability of the French nuclear fleet. Afterwards, Diego has also participated in the development of new software tools for modelling price curves, generation asset performance and other topics related to the energy market. 

Diego Marroquin

Junior Consultant

Haya Energy-6

Profesional Experience

Céline joined Haya Energy Solutions in November 2021 as marketing and administration manager. She had a first professional experience in the tourism sector as a social media manager. At HES, her activities are focused on the development of the company’s visibility at European level through: commercial actions, content marketing and development of brand strategy. Céline is also involved in the management of the company’s communication: optimisation of the website (WordPress & Elementor), LinkedIn, publication of the monthly newsletter and the organisation of conferences. Céline participates in energy projects with the clients and acts as coordinator and project manager. Finally, she is in charge of administration (accounting, expenses management, invoicing).   


Céline graduated in Spanish and English Philology at La Sorbonne (France – 2018) and holds a Master’s degree in Project Management and Cultural Tourism (Clermont-Ferrand/ Buenos Aires – 2021). 

Céline Haya Sauvage

Marketing Responsible

Céline Sauvage

Investment Advice

“Decarbonization of the Energy and Transport sectors is arguably today’s main economic driver for the industry.”

Profesional Experience

His career started in civil engineering as a Project Manager in France, Martinique and Australia. Afterwards, he became the General Manager of a subsidiary in Venezuela. In 1992, he established Dalkia in Germany (district heating, cogeneration, and partnerships) and represented Véolia in Thailand. In 2000, he opened the commercial office of Endesa in France to take advantage of the liberalized retail market. From 2006, as a development Manager at Endesa France, he led Endesa’s plan for Combined Cycle generation in France and developed the wind and PV portfolio of Snet at the same time. Philippe Boulanger worked for 3 years at E.ON’s headquarters coordinating the company´s activities in France. He was strongly involved in the French hydro concession renewal project. As a Senior Vice President – Project Director at Solvay Energy Services from April 2012 to February 2014 he was in charge of the H2/Power to gas and European direct market access deployment projects. Philippe has been an HES expert since 2014.


Philippe Boulanger holds engineering degrees both from the Ecole Polytechnique and the Ecole Nationale des Ponts & Chaussées (France) and has a combined experience of more than 25 years in energy and infrastructure. In addition to English, Mr. Boulanger is fluent in French, German & Spanish.

Philippe Boulanger

Electricity Expert


“The world is changing. New investors pay particular attention to the energy sector while historical actors adapt their position to the market.”

Profesional Experience

Antonio started his career in the electricity sector in 1991 working as a member of the General Manager’s team at Sevillana de Electricidad (Spain). In 1997, he was appointed head of commercial regulation at Endesa Distribución. In 2000, he joined the mergers and acquisitions (M&A) department of Endesa Europe. He was appointed Managing Director of Endesa Power Trading Ltd (UK) in 2003. A year later, he became responsible for energy management at SNET (France). In 2008, he was appointed Managing Director of SNET (France). In 2009, he became Director of Corporate Development at E.ON France. In 2011, he founded Haya Energy Solutions (HES), a consulting firm focused on optimising the energy management of consumers, producers and retailers of gas and electricity. From 2015 to 2018, Antonio combined the consulting activity at HES with the general management of 2 production facilities in France (2 CCGTs x 410MW), owned by KKR. At the end of 2018, he joined Asterion Industrial Partners, an infrastructure investment fund, as an operating partner. Antonio currently devotes most of his efforts to the Asterion Portfolio, while advising through HES companies in the energy sector in France, Italy, Germany, UK and Spain. 


Antonio graduated from the Escuela Técnica Superior de Ingenieros of Seville (Spain) and holds an MBA degree from Deusto University (Spain). 

Antonio Haya