Capacity margin
Planning our electric future: a White Paper for secure, affordable and low-carbon electricity, Glossary, published by the Department of Energy & Climate Change on 14 July 2011, defines capacity margin as: ‘The difference between peak demand and installed capacity, adjusted for probable availability at peak.’
Where the Capacity Market is: ‘A type of Capacity Mechanism in which the total volume of capacity required is estimated, and providers willing to offer capacity (whether in the form of generation or non-generation technologies and approaches such as storage or demand side response) can sell that capacity. There are several forms of Capacity Market, depending on the nature of the ‘capacity’ and how it is bought and sold.’
And the Capacity Mechanism is a: ‘Policy instrument designed to help ensure security of supply by providing a more secure capacity margin than that which would be determined by the market without intervention.’
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