Is the Energy-only-market functioning or are regulatory "capacity mechanisms" needed to secure generation adequacy? The author answers the questions regarding the If and How of capacity mechanisms by analysing both the possible market-failures of the electricity market and the national and European regulatory framework for generation adequacy. The work proves the efficiency gains of optimized Energy-only-markets and pleads strongly for a coordinated approach to secure generation adequacy by using the internal electricity market. Different capacity mechanisms are analysed in the light of the European Directives (e.g. 2009/72/EC) and the limitations established by Art. 34 TFEU (free movement principle) together with Art. 107 I TFEU (prohibition of State Aid). The author further illustrates the strategic reserve approach under German energy law (Sect. 13 et seq. EnWG), aspects of competition law and finally the possibilities of a stronger European cooperation in the light of Art. 194 TFEU.