System Security and Plant Margin with Intermittent Renewable Generation

Regulators have a difficult task of creating a framework that secures future electricity supplies for end users. In liberalised markets this is becoming more difficult due to increasing uncertainty, partly because of the priority given to renewable energy sources, which deters investors in conventional generation.  The renewable energy displaces conventional generation output reducing their utilisation to levels that may not be financially viable. This has prompted some government agencies to consider the deployment of capacity markets to encourage new entry by providing a stable income. This involves fixing a level of security on behalf of consumers and determining the level of capacity required to realise this in practice. A complication with intermittent renewable generation is fixing the capacity contribution that can be expected from intermittent sources like wind. There is also a need to determine the potential contribution from increased levels of international interconnection and demand side regulation. This paper discusses some of the issues facing regulatory and government agencies including:

  • A methodology to analyse the loss of load probability taking account of the probability of generation availability and demand levels
  • The analysis of the economics to establish the optimal level of security when the capital cost of new plant equates to the value of lost load;
  • An assessment of the potential contribution from intermittent sources like wind generation
  • The evaluation of the contribution from adjacent uitlities through interconnections;
  • The potential impact of demand side developments and regulation.

Acknowledged Paper of the 2015 ERRA Regulatory Research Award.


Murray, Barrie

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