Wholesale electricity spot market design: Find a way or make it

Designing wholesale electricity spot markets even after three decades of experience in dozens of countries continues to be a challenging task. The challenges arise from a myriad of options that exist without adequate level of unbiased guidance, and experiences in real-life markets where successes and failures are also open to the interpretation of experts. This is particularly a critical issue in the developing world where wholesale spot markets are yet to be established in 80 % of the countries and the experience in the remaining 20 % countries with an operational market, is mixed. There are certain trends in selection of market design that leave significant room for improvement including fallacies that should be avoided. Implementation of markets have also been problematic in most cases including unrealistic timetable and inadequate consideration of transition mechanism that have also hampered market development. In this article, we present our views on how policy makers, stakeholders and development institutions should think about the choices around market design and some of the common pitfalls around its implementation. © 2021 Elsevier Inc.