How can a new combined cycle gas turbine (CCGT) compete successfully against peaking capacity? For CCGT investors to be able to back competitive offers into the next T-4 Capacity Market auction for delivery year 2020/21, they need to be able to rely on the drivers of energy margins, including:
- the impact of rising loss of load probabilities (LOLPs) on cash-out prices; and
- the achievement of increased load factors by low efficiency, price-setting peaking plant.
At the same time, the case for CCGT investment will be helped if investors in competing peaking plant are cautious about the extent of revenue contribution they anticipate from ancillary services.
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