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

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

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.

Suggested Citation

  • Brito-Pereira, Paulo & Rodilla, Pablo & Mastropietro, Paolo & Batlle, Carlos, 2022. "Self-fulfilling or self-destroying prophecy? The relevance of de-rating factors in modern capacity mechanisms," Applied Energy, Elsevier, vol. 314(C).
    • Handle: RePEc:eee:appene:v:314:y:2022:i:c:s0306261922003580
    DOI: 10.1016/j.apenergy.2022.118939
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