‘Capacity matters’

“Overstating the public benefit by over 90%, no matter how welcome the low carbon energy contribution, is misleading and simply wrong.”

“By generating electricity in smaller amounts closer to end-users, we can dramatically increase energy efficiency, reduce carbon pollution, improve grid resiliency, and curtail the need for new transmission investments”.

One often reads in the news, even in technical magazines, that a newly installed solar development produces sufficient electricity to cover the energy demands of, say, 10,000 households. Most people have no idea that such a message is misleading.

This is, however, not clear to everybody, especially in the case of the average voter (and most policymakers), who are unfamiliar with capacity factors, utilisation factors and load factors. One often reads in the news, even in technical magazines, that a newly installed solar development produces sufficient electricity to cover the energy demands of, say, 10,000 households. Most people have no idea that such a message is misleading.

Firstly, final electricity use is only 12% of total global energy use. Secondly, households consume, on average, only 20% of the electricity needs of a modern nation. Globally, 46% of electric energy supplied goes to industry and the remaining 34% is for services. Using only households as a criterion for covering electricity demand gives an over optimistic idea of such a solar development’s achievements. Thirdly, solar developments’ output is variable and cannot be relied on to cover a given demand.

Solar photovoltaic (PV) panels also show large output variability. They do not produce at night, and have limited output in the darker seasons. Backup power is required for these renewable sources, and cogeneration and distributed generation are the best options.

For a proper analysis of the need for and benefits of local generators, we must distinguish between capacity factors, utilisation factors and load factors. Today, exactness is crucial in order to understand the implications of these factors.

We can define the capacity factor as the averaged unrestricted output divided by the installed capacity. For solar PV panels in the UK the capacity factor is around 11%. If solar developments’ output was noticeably curtailed, their so-called utilisation factor would be lower than the capacity factor. The utilisation factor of a generator is the actual averaged output divided by the installed capacity. The load factor of a generator is the instantaneous output divided by its nominal capacity.

Imagine a case of no renewables in a system, while fuel-based generators have a utilisation factor of 60%. The load factor might vary between 100% and 60%. Now, volatile renewable generators will be connected with the same installed capacity as the fuel-based generation. If the renewable generators have a capacity factor of 15%, and their output is not restricted, the utilisation factor of the fuel-based generators will decrease from 60% to 45%. For large central power plants, this would mean operational and financial disaster.

Distributed generation, however, can offer the required flexibility. Its load factor can vary widely. Because of its relatively low capital costs, even a lower utilisation factor is not a problem. So, it is essential to know all about capacity factors, utilisation factors and load factors and are not taken in by the ‘standardised’ and misleading claims of developers.

By generating electricity in smaller amounts closer to end-users, we can dramatically increase energy efficiency, reduce carbon pollution, improve grid resiliency, and curtail the need for new transmission investments.

Distributed generation (also called on-site generation or decentralised generation) is a term describing the generation of electricity for use on-site, rather than transmitting energy over the electric grid from a large, centralized facility (such as a coal-fired power plant). As economic development outpaces the expansion of electricity supply in some areas of the country, and with other regions facing constraints on the ability to deliver power where and when it is needed, it is important to encourage local options for electricity transmission.