This Working Paper considers a convention for estimating the ‘system reliability costs’ that can arise if intermittent renewable generating plant is added to an electricity network. The analysis is concerned with the costs of maintaining a measure of reliability, such as Loss of Load Probability (LOLP). This measures the probability that peak demands can be met. It is predicated on the assumption that intermittent generation tends to make a lower contribution to reliability than conventional thermal generation. In other words it estimates the costs that will arise when capacity credit is lower than capacity factor.

Costs, in this context, are defined as any additional cost relative to a situation where the same energy is delivered by a conventional generator. The paper is intended to be read in conjunction with the UKERC report 'The costs and impacts of intermittency', which provides a comprehensive definition and exposition of terminology.