Course 04 of 20 · Power and Electricity Desk Academy

Generation Economics & Merit Order

Stage A, Electricity foundations. Level 2 of 10.

The build of a unit variable cost stack and the ranking of plant into a merit order.

126 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 02, Course 03

Enrol or enquire See the 126 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

12 modules · 126 chapters

Open any module for its full chapter list, in teaching order.

M0 Why a Running Cost Decides Who Generates Ch 1-10
  1. The Cost That Decides Whether a Unit Runs
  2. Short Run Marginal Cost in Plain Terms
  3. Which Costs Belong in the Figure and Which Do Not
  4. The Stack as a Picture of a Generating Fleet
  5. The Marginal Unit and Why Desks Watch It
  6. A Running Cost Is Always Dated and Sourced
  7. Whose Running Cost Are You Building
  8. The Bid Is Not the Running Cost
  9. The Plant Register You Build From
  10. What a Cost Stack Leads To
M1 Fuel Delivered to the Burner Tip Ch 11-21
  1. From Hub Price to Burner Tip Cost
  2. Transport and Capacity Charges on Gas to a Power Station
  3. Coal, Lignite and the Cost of a Tonne at the Yard
  4. Calorific Value and the Energy You Actually Bought
  5. Fuel Oil, Diesel and Distillate Backup
  6. Biomass, Waste and Fuels With a Negative Price
  7. Nuclear Fuel as a Running Cost Line
  8. The Fuel a Unit Burns Before It Sells Anything
  9. Hedged Fuel, Contracted Fuel and What the Stack Should Use
  10. Fuel Currency and the Rate You Convert At
  11. The Fuel Line Closed: One Unit, One Hour
M2 Efficiency and the Conversion Term Ch 22-32
  1. Efficiency, Heat Rate and the Same Idea Twice
  2. Gross and Net Heating Value in a Station's Efficiency
  3. Sent-Out Output Against Generated Output
  4. Auxiliary Load and the Power a Station Consumes
  5. Why a Published Design Efficiency Flatters a Plant
  6. Ambient Conditions and the Output a Turbine Gives You
  7. Cooling Water, Condensers and the Efficiency They Cost
  8. Efficiency at Less Than Full Output
  9. Combined Heat and Power and the Steam You Must Supply
  10. Estimating a Competitor's Efficiency From Public Data
  11. The Conversion Term Fixed for Every Unit
M3 Carbon and Environmental Charges in the Running Cost Ch 33-42
  1. Emissions Cost as a Variable Row
  2. Emission Factor by Fuel and What It Multiplies
  3. Carbon Intensity Per Megawatt Hour, Unit by Unit
  4. Free Allocation and the Cost a Generator Still Faces
  5. A Carbon Price Floor or Levy Layered on Top
  6. Allowances Bought Forward and the Price the Stack Uses
  7. Nitrogen Oxides, Sulphur and the Reagents They Consume
  8. Operating Hour Limits and the Cost of a Scarce Hour
  9. Water, Ash and Waste Disposal Charges
  10. The Environmental Rows Totalled Onto the Fuel Cost
M4 The Non-Fuel Variable Lines Ch 43-52
  1. Variable Operating and Maintenance Cost
  2. Major Overhauls Charged to Running Hours
  3. Long Term Service Agreements and What They Charge On
  4. Network Charges That Vary With Generated Output
  5. Losses Between the Generator and the Metering Point
  6. Levies and Charges Imposed Per Unit Generated
  7. Chemicals, Lubricants and Consumables Per Running Hour
  8. The Fixed Costs You Must Resist Including
  9. A Variable Cost Template Every Unit Fills In
  10. One Unit's Running Cost, Built Line by Line
M5 Starts, Minimum Load and Inflexibility Ch 53-63
  1. Why Starting a Unit Costs Money
  2. Hot, Warm and Cold Starts Priced Separately
  3. Spreading a Start Cost Over the Hours It Buys
  4. Minimum Stable Generation and the Floor It Sets
  5. Why Changing State Commits a Unit for Hours
  6. Ramp Rates and What a Unit Can Reach in an Hour
  7. The Avoidable Cost of One More Hour
  8. Two Running Costs for the Same Unit
  9. Must Run Plant and Output Nobody Chose
  10. Availability, Outages and What Is Actually in the Stack
  11. A Start Cost Decision Worked Through
M6 A Cost Stack for Every Technology Ch 64-74
  1. Nuclear Plant at the Bottom of the Stack
  2. Lignite and the Economics of a Mine Mouth Unit
  3. Hard Coal Units and Their Place in the Order
  4. Combined Cycle Gas Units, the Usual Marginal Plant
  5. Open Cycle Turbines and Reciprocating Engines
  6. Oil Fired and Dual Fuel Plant
  7. Biomass and Waste to Energy Units
  8. Combined Heat and Power Units in the Order
  9. Interconnector Imports as an Entry in the Stack
  10. Demand Side Response as Negative Capacity
  11. A Technology Cost Library You Can Reuse
M7 Plant With No Fuel Bill Ch 75-84
  1. Zero Marginal Cost and What It Really Means
  2. Support Payments That Push an Offer Below Zero
  3. Wind and Solar Enter the Stack as a Forecast
  4. Run of River Hydro and the Water That Cannot Wait
  5. Reservoir Hydro and the Value of the Next Cubic Metre
  6. Setting a Water Value for a Reservoir Unit
  7. Pumped Storage Priced Off a Round Trip
  8. Batteries in a Merit Order
  9. Curtailment and Output That Cannot Be Sold
  10. The Left Hand End of the Stack Assembled
M8 Ranking the Fleet Into a Merit Order Ch 85-96
  1. Sorting the Register Into an Order
  2. Which Capacity Figure Each Step Uses
  3. The Shape of a Stack and What It Tells You
  4. Where the Steps Cluster and Why It Matters
  5. Aggregating a Multi Unit Site Into Steps
  6. Building a Stack for a Whole National Fleet
  7. Filling the Gaps in a Fleet You Cannot See
  8. A Stack Per Hour, Not Per Day
  9. Out of Merit Running and Why It Happens
  10. Documenting a Stack So Others Can Audit It
  11. Rebuilding a Stack Tomorrow Morning
  12. A Merit Order Built for One Settlement Period
M9 Reading the Stack Against Demand Ch 97-106
  1. Laying a Load Shape Over the Stack
  2. Demand Net of Capacity That Cannot Be Chosen
  3. Identifying the Marginal Unit in a Given Hour
  4. A Cost Based Expectation of Where Price Should Sit
  5. When the Observed Price Sits Above the Stack
  6. When the Observed Price Sits Below the Stack
  7. Inframarginal Rent and What a Cheap Unit Earns
  8. A Daily Profile of Marginal Units
  9. Seasonal Stacks and the Same Fleet in Winter
  10. Reporting a Stack Read to a Trading Desk
M10 Moving the Stack Ch 107-116
  1. What a Fuel Price Move Does to the Order
  2. The Coal to Gas Switching Point on a Fleet
  3. A Carbon Price Move Through the Whole Fleet
  4. Switching Bands Rather Than Switching Points
  5. An Outage Removes a Step From the Middle
  6. New Capacity and Closures Reshaping the Order
  7. Growing Zero Cost Capacity and a Thinner Middle
  8. Which Input Actually Decides the Answer
  9. Monitoring Triggers Instead of Rebuilding Daily
  10. Backtesting a Stack Against Settled Outcomes
M11 A Fleet Costed End to End, and the Limits Ch 117-126
  1. A Fleet Costed End to End, Part One: The Register
  2. A Fleet Costed End to End, Part Two: The Cost Rows
  3. A Fleet Costed End to End, Part Three: The Order
  4. A Fleet Costed End to End, Part Four: The Read
  5. Reconciling Two Analysts' Stacks of One Fleet
  6. Presenting a Stack to People Who Will Challenge It
  7. What a Merit Order Cannot Tell You
  8. Where Cost Based Reasoning Fails Outright
  9. Honest Uncertainty in a Published Stack
  10. What Later Power Courses Assume You Can Build

The brochure gives each of these 126 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 4 of twenty

It stands alone, and it is also the entry point to the Power and Electricity Desk Academy pathway.

Enrol or enquire See the whole pathway