De-rated capacity margin represents a metric which could be used to measure electricity security of supply as well as to set a reliability standard.
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2 October 2020
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The de-rated capacity margin measures the amount of excess supply above peak demand.
De-rating means that the supply is adjusted to take account of the availability of plant, specific to each type of generation technology.
It reflects the proportion of an electricity source, which is likely to be technically available to generate at times of peak demand.
For example, in Ofgem's Electricity Capacity Assessment, a combined cycle gas plant is assumed to be available 85% of the time (DECC Reliability Standard Methodology, July 2013).
Article 15(4) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD) stipulates that transmission system operators must not increase the reliability margin calculated pursuant to Regulation (EU) 2015/1222 (CACM Guideline) due to the exchange of balancing capacity or sharing of reserves.
Inaccurate information of the Transmission System Operator about de-rated capacity margin are prone to be assessed as a breach of the prohibition of market manipulation under REMIT (Article 5).
Practical example is provided by the Ofgem, which reported that during specific periods between November 2015 and January 2016, National Grid Electricity Transmission plc’s (NGET) erroneously caused incorrect de-rated capacity margin calculations to be published through Elexon’s online platform, which resulted in false or misleading signals as to the supply of, demand for, or price of wholesale energy products being given to the market, contrary to Article 5 of REMIT, as defined under its Article 2(2)(b) (see Ofgem investigates National Grid Electricity Transmission plc under REMIT for publishing incorrect market information).
This case underlines the significance of the precise data on the de-rated capacity margins in the wholesale electricity markets.
According to the Methodology for calculating the value of lost load, the cost of new entry and the reliability standard in accordance with Article 23(6) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (Annex I to the ACER Decision No 23/2020 of 2 October 2020 on the Methodology for calculating the value of lost load, the cost of new entry, and the reliability standard (VOL CONE RS)) ‘de-rating capacity factor’ means the average share of the NGC of a capacity resource, which is likely to be technically available to operate when ENS is positive; while the NGC (net generating capacity) means net generating capacity pursuant to the methodology for the European resource adequacy assessment in Annex I to ACER Decision No 24/2020 (ERAA methodology).
Regulatory chronicle
2 October 2020
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Documentation |
DECC Reliability Standard Methodology, July 2013
National Grid’s lessons learned report Electricity Balancing Significant Code Review
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Links |
OFGEM website: Electricity security of supply