STORY Power Generation

Capacity market: A model for the whole world?

Posted on March 19, 2024 by Katherine Wooltorton, Images by Conrad Energy, Rolls-Royce Power Systems

UK capacity market ensures security of supply
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The UK capacity market is designed to provide grid stability at times of peak demand and stress event, effectively acting as a safety net against potential future blackouts. Under the arrangement, new and existing energy providers receive a regular income stream for guaranteeing that a certain capacity will be available on demand. Key assets within the market are Rolls-Royce's mtu gas gensets.  

Renewable energies are on the rise worldwide which is good news for the climate. But presents some challenges as the generation of electricity from renewable sources fluctuates greatly due to the unpredictability of the weather. The sun and wind cannot be switched on and off as easily as the gas supply in a power plant, for example. So the need for a diverse energy sector with flexible facilities that are sufficiently controllable and can step in and provide power as needed remains. Since coal is not a climate-friendly alternative, plants powered by gas engines, that can also run on green hydrogen, are a good alternative.

Gas engines secure the power grid in all weather conditions

In the UK, there are plenty of these, which use over 500 mtu gas engines from Rolls-Royce. Their big advantage is that they can be flexibly ramped up whenever they are needed.  
mtu gas engines have been helping Conrad Energy, the UK’s leading flexible energy generator, play a critical role in ensuring the UK's energy stability and security since 2017.  

500 mtu gensets are already in use in the UK capacity market, guaranteeing a reliable power supply for the country.

"Our first flexible gas generation project launched in 2017 in Staffordshire and comprised eight mtu 20VL4000L64 engines,” explains Steve Conry, Chief Operating Officer at Conrad Energy. “mtu units were the right choice for our needs based on value, electrical efficiency and exhaust emission limit values.”

Today, Conrad Energy operate around 85 individual mtu units with a collective installed capacity of circa 185MW. Their total fleet typically operates around 1,500 hours per year, generating around 1,029,000 MWh - enough to supply 381,000 households with electricity.  

The mtu engines within Conrad’s fleet operate at good levels of availability and reliability, fleet average availability is in excess of 90% - despite the challenges of multiple starts and relatively short running periods, on average we see 2 operational hours for each engine start.

Steve Conry, COO Conrad Energy

mtu gas gensets are characterized by high efficiency and low emissions and are approved for use with a hydrogen blend as soon as it becomes more widely available, and also offer the possibility of being easily adapted for use with 100% hydrogen in the future.  

Gas gensets are modular, scalable and flexible

In contrast to many large gas turbine plants, facilities powered by mtu gensets (including those involved with peak lopping) can be built within just 12 months offering a rapid deployment solution to meet the growing energy demand. These modular, containerized units are scalable and easy to install anywhere there is access to the grid and gas points. They can called to action within 120 seconds. Since most units only operate at full power two or three times a day for a few hours at a time, their maintenance and overhaul costs are low over the entire life cycle of the genset.
They can also be supported by an optional ValueCare maintenance agreements with the key benefits and reassurance these provide.

The UK electricity market is a positive example for other countries to switch to greener energy. The capacity market model provides a high level of energy security and a stable revenue source for the participants which, if they choose, can support future investment or maintenance.  

Capacity market versus energy-only market

In an energy-only market, as it currently still exists in most European countries, only energy deliveries that are actually made are traded and remunerated. But due to the growing share of renewable energies, the operating hours of conventional power plants are falling. This makes them less lucrative. But the capacities of the power plants are still important. They may be less in demand, but when they are needed, they have to be there.  

With the capacity market model, on the other hand, capacity providers no longer just sell electricity, but also the certainty that it will be available, as and when needed, to support grid stability and the auction process helps to ensure competitiveness.

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