Tuesday, 27 October 2015

Capacity market payments are an economic externality imposed on the system by intermittent renewables

Two (related) points:

  1. Geographical location is important. Britain is between 51º and 59º latitude. We have short winter days with the sun low on the horizon. Quite long summer days. Summer solar provides a decent amount of electricity. Solar in deep min-winter is about an eighth of summer's. Peak electricity demand occurs in winter, between 5:30pm and 7:00pm long after the sun has set. Meeting peak demand is now a huge concern.
  2. Likewise wind is intermittent. At any time an anti-cyclone could cover Britain reducing wind power to about 5% of its nameplate (600 MWe in Britain is 5% of 12GWe). Such low wind days can hang about for up to 6 days [as they did in early Sept 2014 (3 times)[4]].

The British government recently introduced a scheme to pay providers able to guarantee baseload supply at peak demand time[1]. We never needed capacity market payments before intermittents but do now. Capacity market payments are an economic externality imposed on the system by intermittents.

Last winter, during the capacity market auction, the greens[3] and their renewable allies furiously campaigned against these capacity market payments.

PS: Some links on capacity market payments:

  1. Capacity market payments
  2. First capacity market auction results
  3. UK coal plants could get up to £2.1bn in capacity market subsidies
  4. Gridwatch database downloads

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