Deliverability matters? Modeling capacity and energy market equilibrium under PJM-inspired framework

The capacity market ensures system resource adequacy by procuring reliable capacity in advance. However, under network transmission constraints, some capacity may not be physically deliverable. To address this issue, this paper constructs a two-layer equilibrium model that integrates the regional capacity market with electricity market and incorporates the capacity deliverability mechanism. Building upon the regional capacity market, the model simultaneously considers the electricity market, introduces the capacity deliverability mechanism to identify undeliverable capacity and compensate for capacity shortfall, enhancing the consistency between capacity commitment and physical fulfillment. Simulation results indicate that the regional capacity market can translate local supply-demand tightness and regional interconnection constraints into differentiated price signals. With the further introduction of the capacity deliverability mechanism, the proportion of deliverable capacity is further increased. At the same time, the deliverability mechanism will reallocate final capacity obligations based on actual delivery performance, altering the capacity performance assessment exposure for power generation companies and further triggering differentiated adjustments to their bidding coefficients. The proposed mechanism not only improves the physical deliverability of winning bids in the capacity market but also provides a screening tool for identifying candidate corridors that warrant further transmission-planning analysis.