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1 of 41
1
2. Why coal
rather than
(new) gas
generatiors?
1.Why a diversity
of generation
types?
3. Negative
prices?
Different fixed &
variable cost
profiles x
variability in
demand
2
Previous lecture
9 12 15 170 24
1
2
3
TIME
Daily
Demand
in MW Load Curve
Daily variations (UK)
DURATION (%)100500
1
2
3
9 12 15 170 24
1
2
3
TIME
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
FIND THE MISTAKE!!!
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
33.3
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
33.3
A bit a difficult load-
duration curve (and also
quite a-typical)
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
How to get this
more typical,
nicer LD curve?
DURATION (%)100500
1
2
3
9 12 15 170 24
1
2
3
TIME
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily
Demand
in MW
Daily
Demand
in MW
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
1
2
3
Fixed cost per
MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
Daily
Demand
in MW D=3-2* Duration
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Technology Costs Table
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
(=8760 hours/year)
Fixed cost per
MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
0%
Cost/MWh
Screening curve
(Capacity-cost based)
Technology Costs Table
Screening curve
(Capacity-cost based)
Screening curve
(Energy-cost based)
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
(=8760 hours/year)
Fixed cost per
MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
0%
Cost/MWh
Use baseload when
capacity factor > 60%
Use peakers when
capacity factor < 60%
Screening curve
(Capacity-cost based)
Technology Costs Table
Install baseload when
capacity factor > 60%
Install peakers when
capacity factor < 60%
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
Daily
Demand
in MW
60
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Screening curve
(Capacity-cost based)
Nuclear
Oil
Old, inefficient plants
(old Coal & OCGT)
Gas (CCGT)
Coal
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
18
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
DURATION
(%)
100500
1
2
3
Daily Demand
in MW
D=3-2*
Duration
Load-Duration Curve
Technology Costs Table
Overview newly introduced curves & table
9 12 15 170 24
Daily
Demand in
MW
1
2
3
TIME
Load Curve
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
0%
Cost/MWh
Screening curve
(Capacity-cost based)
19
This lecture
20
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
Daily
Demand
in MW
S
50
0
0 1.81 32
DMAX
P
DMIN
Q
Supply & demand curve
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
MC=0
MC=50
Uniformly
distributed
21
Nuclear Coal Gas Oil Shortage
Exceptionally highVery high
ModerateLow
Load curve
00 05 07 10 13 15 18 24
Very Low
Low
Moderate
Very high
Exceptionally high
Very LowP
0
20
30
50
P=0
P=20
P=30
P=50 P=CAP
Hours
21
Price is set by the variable costs
of the most expensive generator
needed to meet demand
Supply & demand curve
22
Optimal Dispatch
of Peakers &
Missing Money
23
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
S
50
0
0 1.81 32
D
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
60%
60
Daily
Demand in
MW
πPEAKER=…πPEAKER=0 πPEAKER=…πPEAKER=0
P
Q
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Supply & demand curve
Technology Costs Table
24
D
S
$/MWH
50
0
PCap
Baseload plants
(P=MC=0)
40%
Peaker plants
(P=MC=50)
60-x%
0 1.81 32
Shortage!!
(P=PCap)
x%
PCap =?PCap =VOLL
(Value Of
Lost Load)
the “missing money” problemzero-profit condition
Supply & demand curve
25
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
59.9%
PCAP=10.050
0.1%
πPEAKER= 0 πPEAKER= 0 πPEAKER=
≈9hrs/year
zero-profit condition
πPEAKER=
0.1% * 10.000= 10
Very high!
Total πPEAKER=0+0+10=10
Zero-profit condition
Supply & demand curve
Technology Costs Table
26
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
59.9%
PCAP=550
0.1%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.001 * 500 =
0.5
Total πPEAKER=0+0+.5 = .
5
Zero-profit condition
Supply & demand curve
Technology Costs Table
27
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
58%
PCAP=550
2%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10 Total πPEAKER=0+0+10=10
Zero-profit condition
Supply & demand curve
Technology Costs Table
28
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
58%
PCAP=550
2%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10
πBASE= 0 πBASE=0.58* 50 =
29
πBASE=0.02 * 550 =
11
Total πBASE=29+11 = 40
Zero-profit condition
Total πPEAKER=0+0+10=10
Zero-profit condition
Supply & demand curve
Technology Costs Table
29
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
58%
PCAP=550
2%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10
πBASE= 0 πBASE=0.58*
50= 29
πBASE=0.02 * 550= 11
P¯=P¯=0.4* 0 + 0.58* 50 + 0.02 + 550=
≈180 hrs/year
P¯=0.4* 0 + 0.58* 50 + 0.02 + 550=
0 + 29 + 11 = 40
Total πPEAKER=0+0+10=10
Zero-profit condition
Total πBASE=29+11=40
Zero-profit condition
Supply & demand curve
Technology Costs Table
30
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
60%-x
PCAP
Total πPEAKER=0+0+10=10πPEAKER= 0 πPEAKER= 0 πPEAKER=
x * (PCAP – MCPeaker) =
10
Peaker
10
CAP
x
P MC
=
−
Peaker
PeakerCAP
FC
x
P MC
=
−
Zero-profit condition
Supply & demand curve
Technology Costs Table
31
S
50
0
0 1.81 32
DP
P=0
P=50
Fixed cost
per MWh
Variable cost
per MWh
Baseload 40 0
Peaker 10 50
40%
58%
P=550
2%
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
60
Daily
Demand in
MW
2
Shortage ≈180 hrs/year
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Supply & demand curve Technology Costs Table
32
BASELOAD
PEAKER
33
Price spike
Can be distinguished from market abuse?
34
What can we do about price-spikes?
- Lower the price-cap
- Then we have lower but more frequent spikes
- Capacity payments
35
36
0 .2 0 .4 0 .6 0 .8 1 .0
p r o b a b i l l i t y
2
4
6
d e m a n d
0 .2 0 .4 0 .6 0 .8 1 .0
p r o b a b i l l i t y
2
4
6
d e m a n d
x~N(1,0.05)
x~N(1,0.1)
x=1
Each level * x
0 . 2 0 . 4 0 . 6 0 . 8 1 . 0
p r o b a b i l l it y
2
4
6
d e m a n d
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
37
0 . 2 0 . 4 0 . 6 0 . 8 1 . 0
p r o b a b illit y
2
4
6
d e m a n d
N: 1 unit
C: 1.8 unit
G: 0.2 unit
O: 2.2 unit
Total installed: 5.2 unit
Pr[D>5.2] =
= Pr[5x>5.2]
= Pr[x>(5.2/5)]
= Pr[x>(1.04]
≈ 21%
Daily Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Is the “energy-only” model valid?
39
Source: ERU
Jiří Krejsa
Yearly Load-Duration Curve:
Duration[y] = Pr[Demand > y]
Installed power capacity 2011 (MW)
Steam 10787,5 53,27%
Nuclear 3970 19,60%
PV 1971 9,73%
Pumped-storage 1146,5 5,66%
Hydro 1054,6 5,21%
Gas 1101,7 5,44%
Wind 218,9 1,08%
Total 20250,2 100,00%
Source: ERU Jiří Krejsa
About 2x more capacity than peak demand!!!
• Remains of the good old times of electricity being run as
state-owned Vertically Integrated Utilities (VIUs) (up to
2000)
– Civil engineers “gold-plate” the system: excess generation
reserves for “just-in-case” disregarding the costs
– Prices calculated as average costs + an uplift for capital expenses
• 1990-2000: Onset of liberalization, privatization and
competition
– Prices are marginal prices
– Due to the excess capacity they are relatively low
– Thus: no investment in new capacity
• Now: “sweating” the assets
Source: Helm, D. 2005. The assessment: the new energy
paradigm. Oxford review of economic policy, vol. 21, no. 1

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Ee w05.1 m_ 2. electricity generation _ part 4 (generation technologies)

  • 1. 1 2. Why coal rather than (new) gas generatiors? 1.Why a diversity of generation types? 3. Negative prices? Different fixed & variable cost profiles x variability in demand
  • 3. 9 12 15 170 24 1 2 3 TIME Daily Demand in MW Load Curve
  • 5. DURATION (%)100500 1 2 3 9 12 15 170 24 1 2 3 TIME Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve
  • 6. DURATION (%)100500 9 12 15 170 24 TIME 1 2 3 1 2 3 Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve FIND THE MISTAKE!!!
  • 7. DURATION (%)100500 9 12 15 170 24 TIME 1 2 3 1 2 3 Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve 33.3
  • 8. DURATION (%)100500 9 12 15 170 24 TIME 1 2 3 1 2 3 Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve 33.3 A bit a difficult load- duration curve (and also quite a-typical)
  • 9. DURATION (%)100500 9 12 15 170 24 TIME 1 2 3 1 2 3 Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve How to get this more typical, nicer LD curve?
  • 10. DURATION (%)100500 1 2 3 9 12 15 170 24 1 2 3 TIME Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve
  • 11. DURATION (%)100500 9 12 15 170 24 TIME 1 2 3 1 2 3 Daily Demand in MW Daily Demand in MW Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Load Curve
  • 12. DURATION (%)100500 1 2 3 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 Daily Demand in MW D=3-2* Duration Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Technology Costs Table
  • 13. 0 60 40 Capacity factor Baseload Peaker 100%60% 10 (=8760 hours/year) Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 0% Cost/MWh Screening curve (Capacity-cost based) Technology Costs Table
  • 15. 0 60 40 Capacity factor Baseload Peaker 100%60% 10 (=8760 hours/year) Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 0% Cost/MWh Use baseload when capacity factor > 60% Use peakers when capacity factor < 60% Screening curve (Capacity-cost based) Technology Costs Table
  • 16. Install baseload when capacity factor > 60% Install peakers when capacity factor < 60% 0 60 40 Capacity factor Baseload Peaker 100%60% 10 DURATION (%)100500 1 2 3 BASELOAD D=3-2* Duration 1.8 PEAKER Daily Demand in MW 60 Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Screening curve (Capacity-cost based)
  • 17. Nuclear Oil Old, inefficient plants (old Coal & OCGT) Gas (CCGT) Coal Daily Load-Duration Curve: Duration[y] = Pr[Demand > y]
  • 18. 18 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 DURATION (%) 100500 1 2 3 Daily Demand in MW D=3-2* Duration Load-Duration Curve Technology Costs Table Overview newly introduced curves & table 9 12 15 170 24 Daily Demand in MW 1 2 3 TIME Load Curve 0 60 40 Capacity factor Baseload Peaker 100%60% 10 0% Cost/MWh Screening curve (Capacity-cost based)
  • 20. 20 DURATION (%)100500 1 2 3 BASELOAD D=3-2* Duration 1.8 PEAKER Daily Demand in MW S 50 0 0 1.81 32 DMAX P DMIN Q Supply & demand curve Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] MC=0 MC=50 Uniformly distributed
  • 21. 21 Nuclear Coal Gas Oil Shortage Exceptionally highVery high ModerateLow Load curve 00 05 07 10 13 15 18 24 Very Low Low Moderate Very high Exceptionally high Very LowP 0 20 30 50 P=0 P=20 P=30 P=50 P=CAP Hours 21 Price is set by the variable costs of the most expensive generator needed to meet demand Supply & demand curve
  • 23. 23 DURATION (%)100500 1 2 3 BASELOAD D=3-2* Duration 1.8 PEAKER S 50 0 0 1.81 32 D P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 60% 60 Daily Demand in MW πPEAKER=…πPEAKER=0 πPEAKER=…πPEAKER=0 P Q Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Supply & demand curve Technology Costs Table
  • 24. 24 D S $/MWH 50 0 PCap Baseload plants (P=MC=0) 40% Peaker plants (P=MC=50) 60-x% 0 1.81 32 Shortage!! (P=PCap) x% PCap =?PCap =VOLL (Value Of Lost Load) the “missing money” problemzero-profit condition Supply & demand curve
  • 25. 25 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 59.9% PCAP=10.050 0.1% πPEAKER= 0 πPEAKER= 0 πPEAKER= ≈9hrs/year zero-profit condition πPEAKER= 0.1% * 10.000= 10 Very high! Total πPEAKER=0+0+10=10 Zero-profit condition Supply & demand curve Technology Costs Table
  • 26. 26 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 59.9% PCAP=550 0.1% πPEAKER= 0 πPEAKER= 0 πPEAKER=0.001 * 500 = 0.5 Total πPEAKER=0+0+.5 = . 5 Zero-profit condition Supply & demand curve Technology Costs Table
  • 27. 27 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 58% PCAP=550 2% πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10 Total πPEAKER=0+0+10=10 Zero-profit condition Supply & demand curve Technology Costs Table
  • 28. 28 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 58% PCAP=550 2% πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10 πBASE= 0 πBASE=0.58* 50 = 29 πBASE=0.02 * 550 = 11 Total πBASE=29+11 = 40 Zero-profit condition Total πPEAKER=0+0+10=10 Zero-profit condition Supply & demand curve Technology Costs Table
  • 29. 29 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 58% PCAP=550 2% πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10 πBASE= 0 πBASE=0.58* 50= 29 πBASE=0.02 * 550= 11 P¯=P¯=0.4* 0 + 0.58* 50 + 0.02 + 550= ≈180 hrs/year P¯=0.4* 0 + 0.58* 50 + 0.02 + 550= 0 + 29 + 11 = 40 Total πPEAKER=0+0+10=10 Zero-profit condition Total πBASE=29+11=40 Zero-profit condition Supply & demand curve Technology Costs Table
  • 30. 30 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 60%-x PCAP Total πPEAKER=0+0+10=10πPEAKER= 0 πPEAKER= 0 πPEAKER= x * (PCAP – MCPeaker) = 10 Peaker 10 CAP x P MC = − Peaker PeakerCAP FC x P MC = − Zero-profit condition Supply & demand curve Technology Costs Table
  • 31. 31 S 50 0 0 1.81 32 DP P=0 P=50 Fixed cost per MWh Variable cost per MWh Baseload 40 0 Peaker 10 50 40% 58% P=550 2% DURATION (%)100500 1 2 3 BASELOAD D=3-2* Duration 1.8 PEAKER 60 Daily Demand in MW 2 Shortage ≈180 hrs/year Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Supply & demand curve Technology Costs Table
  • 33. 33 Price spike Can be distinguished from market abuse?
  • 34. 34 What can we do about price-spikes? - Lower the price-cap - Then we have lower but more frequent spikes - Capacity payments
  • 35. 35
  • 36. 36 0 .2 0 .4 0 .6 0 .8 1 .0 p r o b a b i l l i t y 2 4 6 d e m a n d 0 .2 0 .4 0 .6 0 .8 1 .0 p r o b a b i l l i t y 2 4 6 d e m a n d x~N(1,0.05) x~N(1,0.1) x=1 Each level * x 0 . 2 0 . 4 0 . 6 0 . 8 1 . 0 p r o b a b i l l it y 2 4 6 d e m a n d Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Daily Load-Duration Curve: Duration[y] = Pr[Demand > y] Daily Load-Duration Curve: Duration[y] = Pr[Demand > y]
  • 37. 37 0 . 2 0 . 4 0 . 6 0 . 8 1 . 0 p r o b a b illit y 2 4 6 d e m a n d N: 1 unit C: 1.8 unit G: 0.2 unit O: 2.2 unit Total installed: 5.2 unit Pr[D>5.2] = = Pr[5x>5.2] = Pr[x>(5.2/5)] = Pr[x>(1.04] ≈ 21% Daily Load-Duration Curve: Duration[y] = Pr[Demand > y]
  • 38. Is the “energy-only” model valid?
  • 39. 39 Source: ERU Jiří Krejsa Yearly Load-Duration Curve: Duration[y] = Pr[Demand > y]
  • 40. Installed power capacity 2011 (MW) Steam 10787,5 53,27% Nuclear 3970 19,60% PV 1971 9,73% Pumped-storage 1146,5 5,66% Hydro 1054,6 5,21% Gas 1101,7 5,44% Wind 218,9 1,08% Total 20250,2 100,00% Source: ERU Jiří Krejsa About 2x more capacity than peak demand!!!
  • 41. • Remains of the good old times of electricity being run as state-owned Vertically Integrated Utilities (VIUs) (up to 2000) – Civil engineers “gold-plate” the system: excess generation reserves for “just-in-case” disregarding the costs – Prices calculated as average costs + an uplift for capital expenses • 1990-2000: Onset of liberalization, privatization and competition – Prices are marginal prices – Due to the excess capacity they are relatively low – Thus: no investment in new capacity • Now: “sweating” the assets Source: Helm, D. 2005. The assessment: the new energy paradigm. Oxford review of economic policy, vol. 21, no. 1

Editor's Notes

  1. For example, for a 1-hour outage, MISO has estimated VOLL at $730-$2510/MWh for residential, $15,000-$50,000/MWh for small commercial and industrial (“C&amp;I”), and $16,000-$78,000/MWh for large C&amp;I customers. The range in estimates shows the range across industries, where, for example the mining sector has a much larger VOLL than the services sector. (See MISO (2006).) Nordpool’s scarcity pricing mechanism is quite simple: if the level of available capacity is so low that TSOs must provide additional supply out of their capacity reserves, then the day-ahead price is increased to the price cap, and prices inthe intra-day and balancing markets must be as high or higher. 94 Joskow (2006a) recommends this method of setting prices equal to the price cap as a “rough and ready” mechanism for scarcity pricing. 95 Nordpool sees its reliance on TSOs’ non-market-based reserves as a transitional market failure, which justifies setting market prices equal to the price cap in an attempt to attract market-based investment.
  2. Capacity market Pay power plants for being prepared to generate, even if they are not called upon
  3. About 2x more capacity than peak demand!!!