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MPR Capacity Factor. William B. Marcus JBS Energy, Inc. for The Utility Reform Network. Two alternatives. Actual Operating Capacity Factor (60-70%) Theoretical Availability (about 90%). Fixed and Variable Costs. Fixed Costs are Incurred regardless of capacity factor

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mpr capacity factor

MPR Capacity Factor

William B. MarcusJBS Energy, Inc.for The Utility Reform Network

two alternatives
Two alternatives
  • Actual Operating Capacity Factor (60-70%)
  • Theoretical Availability (about 90%)
fixed and variable costs
Fixed and Variable Costs
  • Fixed Costs are Incurred regardless of capacity factor
  • Variable costs increase as operations increase
  • Cost in cents per kWh declines as capacity factor increases because fixed costs are spread over more kWh of operations
combined cycle economics
Combined Cycle Economics
  • Why does a plant only run at 60% of the time when it could theoretically run 90% of the time?
  • ECONOMICS
  • Either cheaper power is available the other 30% of the time, or demand isn’t available to keep it running at full capacity, or both.
so what does a baseload renewable avoid levelized market price in all hours
So what does a baseload renewable avoid (levelized market price in all hours)?
  • 100% of the fixed cost of a combined cycle
  • Operating costs of the combined cycle when it would run
  • Costs that are a maximum of the variable costs of the combined cycle during hours when the combined cycle would not run or would be turned down.
  • In other words, fixed and variable costs calculated at a 90% capacity factor
time differentiation doesn t help
Time Differentiation Doesn’t Help
  • Lower prices at 3 AM and higher prices at 3 PM are not enough.
  • The total number before time differentiation is too high, so that prices paid for baseload operation are still too high.
conclusion
Conclusion
  • Appropriate payout for baseload or intermittent plant that is not dispatched spreads fixed costs over the theoretical maximum capacity factor for a combined cycle.
  • Time-differentiated MPR for 30-40% of low load hours should be no more than combined cycle variable cost. All fixed costs should be in 60-70% of hours for time-differentiation purposes.
  • Only this method gives appropriate value to both baseload plant and plants that can be dispatched downward in off-peak hours.