Methods for Reporting Costs Related to the Capacity Credit of Intermittent Generation Relative to Conventional Generators

The reason for producing this note is that two distinct strands of thought can be found in the literature on how to conceptualise the costs associated with any additional capacity required to maintain reliability when intermittent generators are added to an electricity network. The first does not explicitly define a system reliability cost rather it assesses the overall change in system costs that arises from additional capacity (Dale et al 2003). This approach can be used to derive ‘system reliability cost’ if combined with an assessment of the impact on load factors of incumbent stations when new generators are added (see footnote 2). The second includes an explicit ‘system reliability cost’. This approach requires that we make an assumption about the nature of the plant that provides ‘back up’(Ilex and Strbac 2002). Both approaches should arrive at the same change in total system costs. In what follows we demonstrate that they can be reconciled, and that this provides a convention for estimating the costs of maintaining reliability of supplies when intermittent generation is added to an electricity system.