De-rating of wind and solar resources in capacity mechanisms: A review of international experiences

Highlights: • Renewable resources must be integrated in all the segments of the electricity market. • Renewable resources should be therefore allowed to participate in capacity mechanisms. • This participation requires the definition of a de-rating methodology. • A review of international experiences on wind and solar de-rating is presented. • Several regulatory recommendations can be drawn. -- Abstract: Non-conventional renewable energy technologies are already a key element in the expansion of many power systems. These resources, whose deployment was fostered through different types of support mechanisms in the last decades, must now be integrated as much as possible in all the segments of the electricity market. Where capacity mechanisms are in place, renewable technologies should be involved in these mechanisms in the same way as any other technology. Renewables would thus not only be able to receive a capacity remuneration, but would also be subject to the commitments that a capacity contract entails. A key and challenging design feature to allow this participation is the definition of a de-rating methodology to evaluate the expected contribution to reliability from renewable technologies. This article presents a comprehensive review of international experiences on this design element, encompassing eleven power systems in the United States, Latin America, and Europe. It illustrates the great variety of regulatory approaches that can be found worldwide and presents a qualitative discussion on renewable de-rating, showing how these methodologies may have to be refined in the near future.