Generation

Where electricity comes from and how it's scheduled. Learn thermal, hydro, nuclear and renewable plants, efficiency and heat rate, load curves, capacity factor, merit order and economic dispatch.

A power system must produce exactly as much electricity as is being consumed, every second, at the lowest cost and within environmental limits. Generation planning and operation decide which plants exist and which ones run at any moment.

Different technologies fill different roles: baseload plants run continuously, mid-merit plants follow daily swings, peakers start in minutes for the highest demand, and variable renewables produce whenever the wind blows or the sun shines.

An analogy

Running a grid is like staffing a restaurant: a core team works every shift (baseload), extra staff come in for lunch and dinner (mid-merit), and on-call staff cover sudden rushes (peakers).

Main generation technologies

Most plants spin a turbine connected to a synchronous generator.

• Thermal (coal, gas, nuclear): heat → steam or gas turbine. Combined-cycle gas reaches ~60 % efficiency.
• Hydro: water head × flow → turbine; fast to ramp, can store energy (pumped hydro).
• Wind and solar: variable, zero fuel cost, connected through power electronics (except some wind).
• Geothermal and biomass: dispatchable renewables.

Load curves

Demand varies over the day and year: low overnight, peaks in the morning and evening (or midday with air-conditioning). The load duration curve sorts hourly demand from highest to lowest and shows how many hours each capacity level is needed — the basis for choosing the plant mix.

Efficiency, heat rate and capacity factor

Heat rate is fuel energy per kWh generated; efficiency = 3600/HR. Capacity factor compares actual output with running flat-out all year: nuclear ~90 %, onshore wind ~25–40 %, solar PV ~15–25 %. A 100 MW solar farm does not replace a 100 MW gas plant one-for-one.

Merit order

Plants are dispatched in order of marginal (fuel) cost — renewables and nuclear first, then efficient gas, then peakers. The last plant needed sets the wholesale price. Adding zero-marginal-cost renewables shifts the curve and lowers prices (the merit-order effect).

Economic dispatch and unit commitment

With quadratic cost curves Cᵢ(Pᵢ), total cost is minimised when every running unit operates at the same incremental cost λ (subject to limits). Unit commitment additionally decides which units start and stop over the next day, accounting for start-up costs, minimum up/down times and reserves — a mixed-integer optimisation run daily by grid operators.

Formulas

• Capacity factor: CF = energy produced / (rated power × hours)
• Efficiency from heat rate: η = 3600 / HR (HR in kJ/kWh)
• Load factor: LF = average load / peak load
• Economic dispatch: dC₁/dP₁ = dC₂/dP₂ = … = λ, ΣP = demand

Worked example: Capacity factor of a wind farm

Given: Rating = 100 MW; Annual output = 262.8 GWh

Find: Capacity factor.

• Max possible = 100 MW × 8760 h = 876 000 MWh
• CF = 262 800 / 876 000 = 0.30

Answer: 30 %

Worked example: Coal burn of a thermal unit

Given: Output = 500 MW; Efficiency = 38 %; Coal energy = 25 MJ/kg

Find: Coal consumption per hour.

• Fuel power = 500 / 0.38 = 1316 MW
• Fuel energy per hour = 1316 × 3600 = 4.737 × 10⁶ MJ
• Coal = 4.737 × 10⁶ / 25 = 189 500 kg ≈ 190 t/h

Answer: ≈ 190 tonnes of coal per hour

Common mistakes

• Wrong: Comparing plants by nameplate MW only. — Right: Compare by energy (MWh), capacity factor, dispatchability and firm capacity contribution.
• Wrong: Dispatching the cheapest-to-build plant first. — Right: Dispatch by marginal operating cost; capital cost matters for investment, not for running decisions.

Applications

• Day-ahead markets: Generators bid into markets that clear hourly (or every 5–15 min) using merit-order and economic-dispatch algorithms.
• Capacity planning: Utilities plan the mix of plant types using load duration curves, fuel costs, capacity factors and reliability targets (LOLE).
• Decarbonisation: Replacing thermal plants with renewables requires storage, flexible demand and interconnection to cover low-wind, low-sun periods.

Key takeaways

• Supply must match demand every instant.
• Capacity factor and heat rate describe plant performance.
• Merit order dispatches the lowest marginal cost first.
• Economic dispatch equalises incremental cost λ across running units.

Going further

• Transmission-loss penalty factors: With losses, dispatch equalises λ = (dCᵢ/dPᵢ)·Lᵢ, where the penalty factor Lᵢ = 1/(1 − ∂P_loss/∂Pᵢ) favours units near the load.
• Reserves and ancillary services: Grids hold spinning and non-spinning reserves (typically the largest single contingency) plus regulation, voltage support and black-start capability, procured alongside energy.
• Levelised cost of energy: LCOE = lifetime (capital + O&M + fuel) / lifetime energy, discounted. It compares technologies' average costs, but ignores when the energy is produced — which matters increasingly for variable renewables.