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Capacity value
Capacity Value
To a utility, capacity has added value if it can be counted on at the time of need – that is, it is “available” to meet demand. On the coldest day of the year, when all the factories of the northwest are humming and thermostats turned up, how sure are we that this machine will be running at capacity? In order to reflect the uncertainty connected with a project’s ability to generate power at peak times, most utilities will give renewable resources a capacity value, which reflects the ability of the resource to provide capacity to a system grid during periods of peak demand. The capacity value of a unit has added benefits to a utility beyond its energy value. As with energy, its benefit depends on each utility’s needs. If a utility is in imminent need of a new gas-fired peaking plant to meet its peak requirements, capacity is more valuable. If the utility possesses (or is interconnected with) a large system with diverse resources, it may be able to cost-effectively integrate a new resource with a lower capacity value. On the other hand, many Northwest utilities have ample capacity available by virtue of the water stored in reservoirs behind Columbia River dams.
