Taking Credit

This article presents some general concepts about capacity credit values, which are illustrated by theoretical examples as well as practical experience from the Swedish electricity market. The capacity credit of a wind generating unit (or a block of generating units) represents the contribution of the unit to the supply adequacy of the system. The capacity credit of a power plant is an abstract quantity based on probability calculations and requires knowledge of the probability distributions for available generation capacity and load. To secure the reliability of supply, the Swedish system operator was given the responsibility to purchase annual contracts for a "power reserve".