Self-fulfilling or self-destroying prophecy? The relevance of de-rating factors in modern capacity mechanisms

Paulo Brito-Pereira, Pablo Rodilla, Paolo Mastropietro and Carlos Batlle

Applied Energy, 2022, vol. 314, issue C, No S0306261922003580

Abstract: Capacity mechanisms aim at enhancing mid- to long-term reliability by adding an extra income for generation and demand response resources, based on their firm capacity, a parameter commonly defined by the regulator. The firm capacity is often calculated by multiplying the installed capacity by a de-rating factor, to reflect the expected capability of the resources to contribute to system reliability. Computing de-rating factors is quite a challenging and pivotal task, for any error in its determination can seriously affect the performance of the capacity mechanism.

Keywords: Capacity mechanisms; Reliability; Security of supply; De-rating; Firm capacity; Capacity auctions (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.apenergy.2022.118939

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