Britain has chosen to secure electricity supplies through a scheme which pays power plants to be available several years in advance, but falling prices suggest this capacity market is overkill and poor value for money, with ample alternative approaches, writes energy finance consultant Gerard Wynn. Courtesy Energy and Carbon blog. The Institute for Energy Economics and Financial Analysis (IEEFA) recently published a review of how nine countries and regions with exceptionally high levels of wind and solar power have coped with the variability of these power sources. A costly solution: Britain has opted for a capacity market, in combination with other approaches, to cope with an expected increase in variability in electricity supply, as the country switches to the wind and sun. But it turns out that countries with far higher levels of so-called variable renewables are doing without capacity markets at all, finding that other measures are sufficient, such as investing in transmission capacity, reforming power markets and requiring renewable energy technologies themselves to play a bigger role in meeting power demand. The UK’s adoption of a capacity market may be overkill, putting vast sums of public money at risk.
Energy Post 27th Feb 2018 read more »