De-rated capacity margin
European Union Electricity Market Glossary




De-rated capacity margin represents a metric which could be used to measure electricity security of supply as well as to set a reliability standard.

The de-rated capacity margin measures the amount of excess supply above peak demand.


De-rating means that the supply is adjusted to take account of the availability of plant, specific to each type of generation technology.


It reflects the proportion of an electricity source, which is likely to be technically available to generate at times of peak demand.


For example, in Ofgem's Electricity Capacity Assessment, a combined cycle gas plant is assumed to be available 85% of the time (DECC Reliability Standard Methodology, July 2013).


Article 15(4) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD) stipulates that transmission system operators must not increase the reliability margin calculated pursuant to Regulation (EU) 2015/1222 (CACM Guideline) due to the exchange of balancing capacity or sharing of reserves.


Inaccurate information of the Transmission System Operator about de-rated capacity margin are prone to be assessed as a breach of the prohibition of market manipulation under REMIT (Article 5).


Practical example is provided by the Ofgem, which reported that during specific periods between November 2015 and January 2016, National Grid Electricity Transmission plc’s (NGET) erroneously caused incorrect de-rated capacity margin calculations to be published through Elexon’s online platform, which resulted in false or misleading signals as to the supply of, demand for, or price of wholesale energy products being given to the market, contrary to Article 5 of REMIT, as defined under its Article 2(2)(b) (see Ofgem investigates National Grid Electricity Transmission plc under REMIT for publishing incorrect market information).


This case underlines the significance of the precise data on the de-rated capacity margins in the wholesale electricity markets.





IMG 0744






DECC Reliability Standard Methodology, July 2013


Ofgem investigates National Grid Electricity Transmission plc under REMIT for publishing incorrect market information


National Grid’s lessons learned report Electricity Balancing Significant Code Review











OFGEM website: Electricity security of supply











Comments (1)
1 Wednesday, 15 July 2015 11:59
DB (person in industry)
The practice of de-rating is a good initial approximation by technology. However at times when electricity is extremely short such as very cold winters the actual availability needs to be de-rated by more than the average since many systems do not function properly. Just as your diesel car won't start or run well... so it is with generators... so I am always rather suspicious of the margin calculations using 'normalised' derated values. Furthermore when looking at electricity it is assumed that gas supplies will not be short and that imports via interconnectors will be at full. In 2010 and 2012 cold snaps affecting the US and whole of Europe stressed not just the GB system but also those that would like to export to us. Thus the models are not sensitive to the feedback and amplification effects suffered under extreme conditions

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