Technical constraints in fossil fuel generators: Impacts on long-term investments signals

As penetration of variable renewable generation increases, many conventional thermal power plants need to operate long hours at their minimum stable levels (MSL) due to operational constraints. In these conditions, they may be generating at times when the price of the system is below their marginal costs, incurring in economic losses and hurting their profitability. This paper discusses how operational inflexibility of some fossil fuel generators will impact long-term generation capacity expansion planning decisions.