The goal of the generation analysis is to develop a methodology for designing a supply mix for the next decades in Ontario.
The levelized unit cost is increasingly outdated, particularly due to the appearance of variable renewable energy sources (vRES) that are not expected to be productive during peak demand periods, but which are assumed to be desirable because they lack fuel costs when they are productive.
In this new generation environment, the characteristics needed for each generation source (including conservation programs, demand response programs, and storage technologies) in costing a mix of technologies is:
capacity value - meaning the expected percentage of nameplate capacity expected during peak demand periods (winter and summer)
capacity cost - the cost (as comparable to the natural gas-fired generator's net revenue requirement contracts)
Incremental cost - the cost of generating a megawatt-hour (MWh) of power - essentially the fuel cost
This is a minimum.
Also desirable:
Legacy capacity for each technology separated from additional capacity (ie. cost of legacy hydro far less than cost of new supply)
Wanted - but unlikely to be able to develop:
Deterioration rate for value of next MW of generation capacity (the more generation the lower the value - true of all sources, but the rate of the decline in value varies significantly)
Background for the approach:
The Real High Price of Low-Value Electricity
The diminishing value, and increasing costs, of wind and solar generation in Ontario