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Electricity Supply and Demand |
Electric Generation Capacity and Energy Use
| Capacity, typically expressed in megawatts, is the capability to generate electrical power. It is necessary for a system to have reserve generating capacity in case of equipment failure, maintenance shutdowns, or extreme weather conditions that serve to increase demand on the system. | Energy Use is a measure of power use over a period of time, and is usually expressed in kilowatt- hours or megawatt-hours. Residential users typically pay for energy usage, while some industrial and commercial users pay for both energy consumed and capacity required. |
Peak demand occurs when consumers in aggregate use the greatest amount of electricity. Over the course of a year, peak demand usually occurs on hot summer afternoons and cold winter evenings. The load profile diagram on the next page shows how electricity demand within a region changes during a typical summer day.
Typical Load Profile
Source: Actual data obtained from Conectiv for a peak summer day in the Delmarva Peninsula service area.
Virtually all power plants operate by using some form of energy to drive a generator to produce electricity. The needed energy can come in the form of steam created from coal, oil, natural gas, or nuclear fission. Gas turbines and internal combustion engines can also be used to drive generators directly. Hydroelectric plants use moving water to spin generators, while wind turbines use wind. Each of these technologies has different performance characteristics, entails different capital costs, and carries different operation and maintenance costs.
The power plants that are least expensive to run operate almost continuously to meet the minimum level of electricity that is demanded by a system (the base load). Also known as base-load facilities, these continually running generators are predominantly coal-fired and nuclear plants. It is desirable for base-load facilities to utilize the least expensive fuels.
During periods when consumers demand more electricity, the power plants that can be quickly fired up to meet the peak load are put into operation. These “peaking plants,” while expensive to operate due to fuel costs (typically oil or natural gas), are relatively inexpensive to construct.
Representative Peak and Off-Peak Wholesale Prices, PJM Region (2005)
* PJM reports this data in $/MWh. To convert data shown in this chart into cents per kWh, divide the number by 10.
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