Energy Systems: A Very Short Introduction by Nick Jenkins

Author:Nick Jenkins [Jenkins, Nick]
Language: eng
Format: epub
ISBN: 9780192543530
Google: FlS_DwAAQBAJ
Amazon: 0198813929
Publisher: OUP Oxford
Published: 2019-11-28T00:00:00+00:00

Box 5 The generation merit order

The merit order, shown in Figure 12, is the classical way of representing the operation of a generating system. It shows the generators of a power system ordered by their operating (short run marginal) cost that is made up of fuel and variable maintenance and staff costs. For minimum cost of operation, the generators are called on to supply the load in order of ascending marginal cost and the price of electricity is the cost of operating the most expensive unit needed. As demand varies throughout the day and year, units are called on to operate following this principle.

Low carbon units, renewables and nuclear, have very low marginal costs and so always operate if the generators are available and the weather permits. When low carbon plant operates it is positioned at the extreme left and the rest of the merit order is translated towards the right. This has the effect of reducing both the average price of electricity and the number of hours of operation that fossil plant can run. Plant with energy storage (fossil or hydro) is still required to follow the net load (the consumer load minus low carbon generation) and as reserve for plant breakdowns. The effect of adding low carbon generation to the power system is to reduce the opportunities for conventional plant to operate but the need for flexible reserve plant increases. These new operating requirements are incompatible with the traditional practice of rewarding generation by the electrical energy generated (MWh) and increasingly generators have to be rewarded through capacity payments. Capacity payments are made to ensure generators are available when needed even if they are not called on to operate.

12. Merit order, showing operating point (O).

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