Capacity and Energy are Not the Same Thing
Providing reliable electricity requires two fundamental things: generation capacity, and energy supply.
These are very confusing terms for much of the general public, but it is really quite simple.
Generation capacity is the maximum amount of energy that can be supplied by a generator. For example, the Pickering reactors are about 500 Megawatts. So that is their capacity. If a Pickering generator operates for an hour at 500 Megawatts, it will have produced 500 megawatt hours, or MWh. That is 500,000 kWh, which is the measurement used on your power bill.
The system in Ontario requires between 13,000 and 27,000 Megawatts of capacity, depending on things like the weather, whether it is a work day, or a weekend, the time of day etc. Cold weather causes extra demand because of heating load, and warm weather causes extra load for air conditioning. Short days, like we have now, cause extra lighting load. Weekdays have factories operating. And load tends to peak around 6PM in the winter, when half the family is at home, dinner is being cooked, and some of the family is still at work.
Ontario has changed recently from a dual peaking jurisdiction to a summer peaking jurisdiction, as more people use air conditioners, and climate change results in warmer summers, and warmer winters.
Peaks require capacity. In fact, for summer peaks, we have some plants that are used at their maximum for only a few hours a year. That’s a lot of capital tied up that is infrequently used.
So we need enough capacity on the system to handle peaks.
Peaking plants tend to be very expensive. For example, the least efficient natural gas plant, such as Ontario Power Generation’s Lennox plant near Kingston, uses about 8.2 cents/kWh for natural gas alone, at today’s natural gas price. In addition, you need to pay for operations and maintenance, depreciation etc, which would amount to another 3-4 cents/kWh. And that is for today’s gas price. A year ago the cost of gas for that plant would have been over 15 cents. And tomorrow, it is likely to go up again. So not only is this source of power expensive, but it is highly volatile.
If the theories on Peak Natural Gas are correct, then this cost of gas will be very high in the future. How much extra will we pay to heat our homes in the future, because we burned that gas to make electricity today?
Of course, if we only use the plant for a few hours a year, then it is no big deal. We can afford expensive power if it gets blended in with some lower cost sources on average.
And that is where energy comes in. In Ontario, we use about 155 Terawatt hours (TWh)/year. That is 155,000,000 MWh, or 155,000,000,000 kWh/year. A TW is 1000 GW is 1000 MW is 1000 kW. So that is an average of 17,700 MW of generation.
It is energy use that causes our environmental problems. The more energy we use, the more coal or natural gas we burn. The more nuclear waste we accumlate. We need to meet the capacity peaks that the system requires. But we also need to supply the energy.
Wind is principally an energy play. So is nuclear. With wind, it may or may not be on when you need it. With nuclear, it may be on when you don’t need it – you can’t shut it down without a time consuming restart. Nuclear can never handle system peaks, as it takes too long to ramp. Some types of hydraulic, such as run of river, are principally an energy play. And we need energy.
Natural gas is principally a capacity play. You can ramp it up fairly quickly. The exception to this is combined heat and power installations, where the generation is occuring any time heat is required. In this case, the natural gas is more of an energy play. Coal is a bit of both – it doesn’t ramp real quickly, and its fuel cost is low, so it can supply cheap energy, and ramp if given sufficient advance notice. Of course the achilles heel of all fossil fuel is carbon emissions. The cost of electricity from coal could easily double or triple over the next decade, as the evidence of climate change continues to drive world wide policy on fossil use.
Waterpower with storage is both an energy and a capacity play. The James Bay reservoirs, for example, have multi year water storage ability. They have the ability to buffer a bad wind year, a high demand year, or a low rainfall year, by releasing more water. And waterpower can buffer wind’s variability, as wind is variable over a relatively short time frame. You don’t need multi year storage for wind – its variations are over days or weeks.
I know that I have simplified, in order to make the concepts understandable. Things like ramp rates, black start capability, or voltage support are also needed to provide reliable power. But capacity and energy underpin it all.
System Operators need both capacity – to supply system peaks – and energy. So they ascribe capacity values to various generation sources. For example, in Ontario, the IESO arbitrarily assigned a summer capacity value to wind of 10%. Other System Operators have used different numbers. And of course they can’t use 100% for other sources. The rivers aren’t always full, and the nuclear plants and fossil plants need maintenance. Their objective is to ensure we have sufficient capacity to meet peak requirements. And that is good – we should be grateful they do these exercises.
Wind is principally an energy play. But it does have some capacity value to the system. And it has no fuel cost risk. No carbon tax or carbon trading risk. It has no rainfall risk. It debt is not paid by the Debt Recovery Charge. It pays its own insurance. And decomissioning a wind turbine is a profitable enterprise, due to scrap value, unlike decomissioning toxic sites, that will need thousands of years of management.
So wind deserves to be in the mix as a major contributor of energy to the system. It just makes sense.
December 13th, 2006 at 8:46 am
Good stuff. This is more informative that what the OPA puts out. I stood up at the OPA meeting in Kincardine and said we should be looking at building wind if we can integrate wind with hydro electric. It we build transmissions lines from northern Manitoba and Quebec, consider the wind potential up north. But we are still limited in how much power we can get to southern Ontario.
To replace 12,000 MWs nuclear and coal in Southern Ontario, at a 10% capacity credit we would have to install 120,000 MWs wind. I expect the capacity credit could go up with if we had enough spare hydro storage to back up wind. There may be storage up north, but we still have get the MWs to southern Ontario. They are going to build a transmission line between Ontario and Quebec. It will carry 1,250 megawatts!!!!!!!! A great expense we can build one from northern Manitoba. Where do we come up with the other 9,000 MWs when the wind doesn’t blow? 200 gas fired units in southern Ontario supplying 70% of the energy on average?
People have been led to believe that wind will solve all our energy needs. Wind can replace coal. Wind can replace nuclear. Yes it can. Dam up more rivers. Build enough transmission lines from up north. But at what cost in terms of $s, the environment and security of supply? Are there better options? Nuclear? Ontario’s made a fine mess of nuclear and we can’t go on making the mistakes we have in the past. But are 200 natural gas units preferable to nuclear? Do we need nuclear units or coal units at this end for grid control reasons? Nuclear can manoeuvre some capacity for meeting peak demands.
People are being led to believe that wind will solve the GHG problem re. our energy supply. This leads to a false sense of security. We carry on doing business as usual. We continue to build unsustainable cities with ever increasing demands for energy. This kind of discusion is good if it helps us arrive at the best decision otherwise the planet will be toast, that’s assuming we are not beyond the point of no return already.
December 14th, 2006 at 8:49 pm
The concept of a “capacity credit” is an creation of system planners that is used for capacity planning. The IESO has chosen 10% capacity credit for wind in the summer, simply because they have no experience with wind. This past summer, wind averaged 22%, so that would be a more useful number.
The GE study at http://www.ieso.ca/imoweb/pubs/marketreports/OPA-Report-200610-1.pdf
says summer capacity credit should be between 16 and 19%, and winter should be between 38 and 42%. So this alone changes your numbers drastically. And you are exactly right – wind is an energy play, and if you can store wind, by using existing dams, building pumped storage, connecting with Quebec’s storage dams etc. then wind can supply a greater amount. Ontario already has considerable storage ability in its waterpower, which supplies 25% of our power. Hydrogen may some day offer an interesting swing load – produce hydrogen from electricity when electricity supply is abundant, for example, when winds are high.
Wind will not solve the GHG problem alone. But it can make a substantial difference. Keep in mind that fossil fuels supply about 25% of Ontario’s power. So getting even 10% of our power from wind would reduce our fossil fuel consumption for electricity by 40%. Conservation is also critical.
September 16th, 2007 at 12:03 pm
[...] Problem: Wind and Solar are intermittent resources, but coal produces too much CO2 and natural gas prices are rising rapidly. [...]
April 15th, 2008 at 10:09 pm
If wind mills increase in use, and more capacity is needed, then the demand response industry or reserves markets should increase along with this, no? This would need to happen in case wind was not available and their was high demand. That is a thought I have, can you let me know what holes are in this theory?
April 15th, 2008 at 10:48 pm
If more capacity is needed, then demand response or reserves also need to be increased. This is true. But if wind is added to the mix, then demand response and capacity do not need to be proportionally increased as much as the increase in capacity required. Why? Because no technology is given a 100% capacity credit. Nukes don’t run all the time, nor does fossil – maintenance is required. We can get good rain years and bad – waterpower can’t always produce at its rated capacity. While the wind may not blow exactly when needed, neither do the other technologies work exactly when needed, and so we design the system to accommodate this. So everything gets a credit that is less than its rated capacity. But everything should get a credit, because everything will work at its rated capacity sometimes.
One other interesting thing – demand, at least in Ontario, has not been increasing due to conservation initiatives. Wind can be integrated today with no requirement to add capacity – capacity already exists. The only impact of adding wind today is that we can burn less fossil.