Capacity Margin

Capacity margin is the percentage by which the expected total available electricity generation supply exceeds the expected peak level of demand, at the time at which that demand occurs.


For example, say peak demand is expected to be 10GW at 2pm. If there is expected to be a total of 12GW supply available at that same time (from whatever mix of sources: coal, nuclear, solar, wind etc.), the difference between the two is 2GW, or 20% of peak demand. So the Capacity Margin is 20%.


This margin acts as an insurance against the unexpected: be that losses of power due to unscheduled plant shutdowns, bad weather or unforeseen surges in demand. A capacity margin is thus essential to support security of supply and a bigger margin indicates a larger buffer against the unexpected.

Recent Posts

See All

Baseload

You may find a variety of slightly different definitions of baseload; which tells you that it isn’t really a technical term with a precise physical definition. Broadly, it’s a term used to describe th

Bankability

Bankability in the context of power project development simply refers to whether (or not) the business plan of that project is acceptable to a bank (who is being asked to provide funding). It is not o

Availability

The term Availability is used in the context of power generation to refer to the percentage of time that a power plant is available to generate (i.e. not shut down for maintenance, out of action becau

© 2020 Grey Cells Energy Ltd.

Registered Company 9678667

Clean Power Made Clear