Unlocking Seasonal Capacity Value: A Sub-Annual Capacity Market for Economic Robustness

As variable renewable energy penetration increases, resource adequacy becomes strongly seasonal, while annual accreditation can mask temporal reliability differences. This paper proposes a Sub-Annual Capacity Market and compares it with an Annual Capacity Market and an uncapped Energy-Only benchmark. Capacity credits are calculated using a marginal ELCC formulation based on Expected Energy Not Served and embedded into phase-specific clearing constraints. Using a Shanxi case study, we examine both deterministic and stochastic settings with 151 jointly perturbed load and renewable scenarios. Results show that ACM and SubACM can both approximate EO outcomes when parameters are well calibrated, but SubACM yields more stable economic performance under uncertainty, with 29% lower cost-deviation standard deviation and 67% fewer tail-risk scenarios, as confirmed by formal dispersion tests. The main benefit of sub-annual design is improved temporal alignment between capacity payments and physical reliability contribution, rather than guaranteed large average cost reductions.