Load and Capacity

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Figure 1 Average daily and annual electrical loads.
Figure 1 Average daily and annual electrical loads.

The demand for electricity, called load, is not always constant and changes with geological location, season, even time of the day. In the United States, for example, daily electricity demand usually follows a pattern called “the load curve,” which is low at nights and early mornings, gradually increasing during the day. It peaks in the early afternoon when industrial activities are the highest and drops back in the late afternoon or early evening (Figure 1 top). On an annual basis, overall demand is higher in summer, when a large number of air conditioners are operating, than in winter. The opposite is true for Canada, where extreme cold winters demand more electricity for heating than cooling. Depending on climate, different regions may experience their peak loads during either summer or winter months. Many regions of the world show curves with two maximums, one in summer and another in winter (Figure 1 bottom). The annual load curve can be constructed by summing up the average daily consumption over each month and plotting it over the period of one year.

Just as demand for electricity varies, so does overall capacity of electricity generation facilities. It depends not only on the number of plants that are operational, but also on whether or not they are operating at their full capacity. When electricity is produced from renewable energy sources such as solar or wind, environmental parameters such as temperature and humidity and factors such as time of day, cloud cover, wind speed, and wind direction also become important.

One way to meet the maximum load is to design a large power plant capable of satisfying the peak demand. This obviously is not acceptable, because the cost is prohibitively high and much of the power plant’s capacity would remain idle most of the time. The other extreme is the baseload capacity; power would seldom drop below it and the plant’s capacity wouldn’t go unused. This is the minimum capacity a power plant must meet at all times and sets the low limit for power plant size. The optimum capacity would obviously be somewhere between the two limits.

Power plants’ total electrical output is measured in megawatts and expressed as installed, peak, baseload, or reserve capacity. Installed capacity is the maximum electricity that can be generated if all power plants are operated simultaneously and at their full capacities. The installed capacity in the US was 900 gigawatts in 2002. Peak capacity is the maximum amount of electricity that is needed in a given period. In any single day the peak demand occurs in the early afternoon when industrial consumption is highest. The peak demand during a year usually occurs during the hottest summer or coldest winter months. Baseload capacity is the minimum amount of electricity delivered continuously at any time during the year. Reserve capacity is the additional capacity that is needed during periods of unusually high demand or during a period of maintenance where some equipment is not operating.

Normally nuclear, coal, or hydropower (from run-of-river ) plants supply the baseload demands. These plants are not suitable for rapid shut downs and start-ups so, except for regularly scheduled maintenance, they remain operational continuously throughout the year. During periods of peak consumption, baseload capacity is not sufficient and additional power generating capacity is needed. Because peak demands last only a few hours at a time and often occur with little or no warning, the additional power should be brought on line or taken off line quickly. In these instances, gas turbines and diesels are much smaller in size and capacity, and any variation in demand can be easily satisfied by adding or removing one or more of these equipments. However, the cost of electricity production using these devices is higher than that of conventional power plants.

Figure 2 Load Duration Curve.
Figure 2 Load Duration Curve.

Every year there may come times when demand exceeds the installed capacity (that of the baseload power plants and all available gas turbines and diesels combined). In such instances, the power company buys power from other large utility companies or from individual farmers, homeowners, and other independent generation producers. If total supply is still not enough and the shortage persists, the power company may be forced to stop or limit power delivery to some customers until demand stabilizes and full capacity is restored.

To stabilize demand, power utilities adjust prices according to a predetermined schedule. Elaborate algorithms can be envisioned where prices are changed according to the time of day and the quality of power (e.g. the current in the line). The “real-time” prices could then be transmitted to appliances. The end user could program the gadget to schedule its operation.

A common practice used to calculate power generation capacity requirements is to calculate the number of hours that power plants must meet a particular demand and plot it in descending order. A sample of such a graph, called the annual load duration curve (LDC), is shown in Figure 2 (1). The abscissa is the time in hours (T = 8,760 hours or 1 year), and the ordinate is the total electrical load measured in MW.

Example: A utility company must meet the electricity demand for a community with daily and annual loads represented in Figure 2. Calculate:

a. The total daily energy production in kWh.

b. The average daily power in MW.

c. The baseload capacity in MW.


a. Total daily electrical output can be calculated by adding hourly productions. Mathematically, this is the area under the average daily load curve. Referring to Figure 2 and adding the hourly loads, daily consumption is determined to be 1,520 megawatt-hours.

b. The average daily power is calculated by dividing the total daily consumption by 24; i.e., 1,520 MWh/24 h = 63.3 MW

c. The baseload capacity is the power generation capacity that satisfies minimum demand, in this case 30 MW.


Capacity Factor

Power plants do not utilize 100% of their capacity all the time. In addition to occasional down-time for repair and maintenance, there are times that demand is not sufficient for a plant to run at full capacity. Other factors such as a lack of necessary resources, moderate weather conditions, or economic sluggishness can also affect the demand.

The capacity factor represents the degree of utilization of a particular power plant over a certain period. It is defined as the ratio of the actual amount of electricity produced within a specified time and what would have been produced if the machinery had operated at full capacity during the same time period (a).

Capacity Factor = (Actual power produced in a given period)/(Maximum power that could have been produced during the same period)

The actual amount of production is calculated as the area under the load curve. The maximum electricity that the plant could produce is calculated by multiplying the peak capacity by the number of hours in the period under consideration. In the United States, the average capacity factors for electricity generation by nuclear, coal, solar, and wind plants are 76%, 67%, 25%, and 40%, respectively (2).

Example: A 500-MW power plant operates at full power 45% of the time, 80% capacity for 50% time, and is shut down for the remaining 5% of the time. What is the capacity factor for this power plant?

Solution: The total power produced is: (500MW)[(1.00)(0.45)+ (0.80)(0.50)+(0.0)(0.05)] = 425 MW The capacity factor for this power plant is 425/500 = 0.85 (or 85%)

Example: To meet the peak capacity demand, a main power plant is equipped with an additional 10-MW from gas turbines. Assume that on average each gas turbine operates at full power 10 hours a day for two months in summer and 8 hours a day for one month in winter. What is the capacity factor for each additional turbine?

Solution: Capacity factor can be calculated by dividing the actual energy use by the energy use if turbines operated 100% of the time.

Capacity Factor = ((10 MW)(10 hours)(60 days)+(10MW)(8 hours)(30 days))/((10MW)(24 hours)(365 days)) = 9.6%

Optimal Size of the Power Plants

Although at first glance it may seem that a power plant must be sized to meet the peak demand, from an economic standpoint, this is probably not the best option. Oversizing the plant will result in only short intervals when it utilizes its full capacity, thus leaving much of its capacity idle the rest of the time.

It is therefore reasonable to size a plant to meet, at minimum, the baseload demands, with additional power generation capabilities to meet peak demands. To reduce stresses on the system it is common to reduce peak loads and redistribute them to off-peak hours. This approach, called load leveling, is done most effectively by restricting access while providing customers with incentives to cut demand. For example, a utility company may offer its customers a cheaper rate if they shift usage from peak hours to hours where demand is lower. Another option, energy storage, is attractive when the marginal cost of the energy storage system is lower than the marginal cost of constructing additional plants. This is usually done by storing the excess capacity during periods of off-peak production and using it during times of peak demand. The last and possibly best option is to reduce consumption through conservation. Energy conservation measures alleviate stress on the grid, reduce load and emissions, and indirectly reduce the chance of power blackouts. Federal and state agencies can encourage conservation by providing tax incentives, rebates, and subsidies to companies that invest in energy-saving practices or allocate funds for energy related research or to individuals who purchase cleaner, more energy efficient appliances.


(1) Thomas, B. G., and Hall, D., “Probabilistic production costing under integrated operation agreement and joint power agency financing,” Energy Economics, pp. 200-208, July 1992.

(2) Hall, Darwin, Private Communications.

(3) Toossi Reza, "Energy and the Environment:Sources, technologies, and impacts", Verve Publishers, 2005

Additional Comments

(a) Instead of Capacity Factors, power companies often give the “Utilization Factor,” which is the ratio of the actual energy produced and the energy produced during the time the machines operated at partial load capacity, not counting the down-times.

Further Reading

Bureau of Naval Personnel, Basic Electricity, Dover Publishing Company.

The Environmental Effects of Electricity Generation, IEEE, 1995.

The Electricity Journal, Direct Science Elsevier Publishing Company, This journal addresses issues related to generating power from natural gas-fired cogeneration and renewable energy plants (wind power, biomass, hydro and solar).

International Journal of Electrical Power and Energy Systems, Direct Science Elsevier Publishing Company.

Home Power Magazine (http://www.homepower.com).

External Links

Federal Energy Regulatory Commission (http://www.ferc.gov).

Energy Information Agency, Department of Energy (http://www.eia.doe.gov/fuelelectric.htm).

California Energy Commission (http://www.energy.ca.gov/electricity).

National Council on Electricity Policy (http://www.ncouncil.org).

Southern California Edison (http://www.sce.com).

Pacific Gas and Electric (http://www.pge.com).