Business & Money
A spate of proposed U.S. tax rule changes soon may open a window of opportunity for certain utilities.
In the mid-1990s, before...
this wise behavior and is therefore much higher than its capacity factor.
EDF Peer Groups
Different types of units will score differently with this type of statistic. In the EDF scoring, base-load units are more often penalized for losing money in the off-peak periods because they are not designed to ramp down. Conversely, they also are more likely to be operating and operating near full capacity during all of the highest prices of the year. A GT unit could do this only if it were to start up in time for a price spike. Thus, just as it would be unfair to compare the capacity factors of a GT and base-load units, it also would be unfair to compare EDF scores outside a well-defined set of peers.
Figure 3 tells two different stories. First, it shows, across all types of units, the relationship between capacity factor and the EDF. When disregarding the type of unit, there is no clear relationship other than the fact that there aren't too many units that operate with capacity factors around 50 percent. Basically, this means that there are base-load units, there are peaking units (or units that act as peaking units), and not much in between.
Clearer trends emerge when one views the chart by type of prime mover. We analyzed the following types: combined-cycle (CC) units, gas turbines (GTs), nuclear facilities, coal steam units, and non-coal steam units. The average EDF scores and capacity factors for each type of unit are presented in Table 3. Note that GTs and CCs have the most variation in their EDF because such units have the flexibility to be operated very poorly or very well. Coal steam units tend to be the best performers because they have high capacity factors and high EDF scores. This is mostly a function of their low costs. They don't lose much money in the off peak, and they're always running near full capacity to capture the high on-peak prices.
Nuclear units have the weakest EDF scores. While nuke units have very high capacity factors, the EDF score penalizes them because they have virtually no ability to ramp up or ramp down in order to reduce the losses associated with off-peak prices.
As a normalized metric of performance, the EDF is particularly useful for ranking the operation of generation facilities. Again, because not all units were created equally, it makes more sense to rank units within peer groups.
1. They have lower fuel costs;
2. They have better heat rates;
3. They are located in a beneficial place on the grid (as reflected in their location marginal prices);
4. They have a higher number of ramp and start periods (i.e., they appear to be more actively managed); and
5. They ramp up and down at the right times.
There isn't too much difference between the performance of the generating units listed in the top 5. However, when you compare units across all of their peers, it becomes quite obvious why some have much better EDF scores than others. The broadest range of