science

Merchant wind power

Merchant wind power is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Merchant wind power rather than just read about it. In short: Merchant wind power (MWP) is a framework of developing electricity from wind turbines placed on land owned by brown-field sites, such as those of heavy industry. The wind-turbine operators then supply the land owners with power at reduced rates.

Key takeaways

Merchant wind power belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Merchant wind power to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Merchant wind power from memory before moving on to harder problems.

Reference excerpt

Merchant wind power (MWP) is a framework of developing electricity from wind turbines placed on land owned by brown-field sites, such as those of heavy industry. The wind-turbine operators then supply the land owners with power at reduced rates.

History The phrase was originally coined by Ecotricity, a UK-based, renewable energy company and wind developer. This has created a market where MWP companies install and operate the turbines on brown field sites, with site owners leasing land to the operator and purchasing green electricity at reduced rates. In most cases the development, installation and operation of the turbine site is carried out by a company specialising in merchant wind power who effectively own and operate the turbines, taking all the financial risk required such as paying for procurement of turbines, installation cost etc.

In the United States Merchant power plant development began in the United States in 1998 with fossil fuel generation projects. In 2000, the first merchant wind plant constituted a signal that wind power costs had declined sufficiently to support investment in wind power without reliance on off-take contracts. In the United States, "merchant power" refers to electric power generation plants built to serve spot electricity markets, without reliance on off-take contracts. Typically, power plants in the US are built based on long-term (10–20 years) contracts or "power purchase agreement" with a wholesale purchaser (such as a regulated utility or power marketing firm). Such arrangements allow for more favorable financing, as lenders and investors are more certain of future plant revenues when a credit-worthy utility agrees to purchase all or most future output at pre-defined prices (note, price may not be fixed, and can be defined either based on broad inflationary indices or linked to related commodity markets). However, in a merchant power arrangement, the plant is built without prior commitment of its output to contractual off-takers. Instead, the power is sold on a spot or short-term contract basis, such as on the PJM Interconnection, NYISO, or ISO-NE independent system operator power markets that have developed in the Northeastern US.

Examples The 11MW wind farm in Madison, New York was the first merchant wind power plant in the United States. It was developed by the unregulated arm of PG&E by Laura Walker. Enron had planned to build the first merchant wind power plant in the country. However, prior to beginning operation in June 1999, the 16.5MW California plant entered into a power purchase agreement for its output. PG&E Generating Company's Madison Windpower Project began commercial operation in New York in October 2000 without relying on a power purchase agreement—thus making it the first pure merchant wind power plant in the country. Another example of a merchant wind farm exists in the UK at Green Park which is situated on the M4 motorway in Reading.

See also Electricity market Power purchase agreement Project finance

References

Worked examples

Example 1 — a first encounter with Merchant wind power

Start with the simplest possible case. Write down what Merchant wind power claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Merchant wind power before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Merchant wind power ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Merchant wind power

In research: Merchant wind power appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Merchant wind power in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Merchant wind power is common in secondary-school and first-year university syllabi. It links to neighbouring topics Wind power, so understanding it makes those chapters shorter.
In everyday life: Look for Merchant wind power outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Merchant wind power in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Merchant wind power means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Merchant wind power out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Merchant wind power in simple terms?

Why does Merchant wind power matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Merchant wind power?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Merchant wind power.