Power Lines Blog

Is increase in merchant generation capacity a positive?

new-generation-capacity

Since 2011, the Association has been conducting analyses of the financial arrangements behind new electric generation facilities constructed each year. In past years, the vast majority of new capacity was constructed under long-term bilateral contracts or utility or customer ownership, with almost no project developers choosing to rely on more volatile wholesale market revenues. But in 2015, that trend shifted significantly, with almost 20 percent of the new capacity constructed under merchant arrangements. (A merchant plant is one that is not owned by a utility or end-use customer, and does not have a long-term bilateral contract for the sale of the power. These plants earn their revenues entirely from the wholesale electricity markets.)

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Demystifying arcane electricity markets

Demystifying Self-supply and Other Arcane Electricity Market Concepts

Where there are no RTO-operated capacity markets, utilities either build their own generation or enter into contracts with generators to buy adequate capacity, keeping prices low for customers. These utilities are able to provide a reliable supply of electricity at a reasonable cost. There is no evidence that capacity markets are necessary. Instead, they primarily serve to create windfall profits for certain merchant generation owners.

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Remembering Nikola Tesla, an engineer’s engineer

Nikola Tesla Day

July 10 is the birthday of Nikola Tesla, one of the most famous, yet underappreciated, electrical engineering minds of all time. He died in 1943 alone, broke, and quite possibly insane in New York City. Today a Google search for ‘Tesla’ brings up a bunch of car dealerships before the Wikipedia entry for the great inventor himself. But for many electrical engineers like me who chose to go into power engineering, Tesla is a hero.

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