Evidence published by the ESB shows that operators of capacity mechanisms in the UK, Ireland and US routinely discount wind and solar generators.
Victorian Energy Minister Lily D’Ambrosio’s assurances that offshore wind would provide a backstop to the energy market are undermined by the real-world experience of capacity markets around the world.
By contrast, coal and gas generators receive ratings of between 79 per cent and 100 per cent – underscoring their reliability. Amid rocketing prices and an unprecedented regulatory suspension of the NEM last week, federal, state and territory energy ministers agreed to press ahead with designing a mechanism that would see energy users pay generators to maintain spare capacity.
ESB report shows “de-rating” factors for different forms of energy in UK, Ireland and US capacity markets.Mr Price noted that the Victorian government has adopted a populist stance in the past and blocked the market regulator’s decision to dispatch power to NSW during previous crises. On the other side of the US, the PJM – one of the world’s largest integrated wholesale energy markets taking in 13 states and the District of Columbia – assigns wind a derating factor of just 15 per cent.
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