But merchant plants, pumping electricity through someone else's lines, often have little or no incentive to produce VAR's, because they are paid primarily for producing real power.
Merchant generators produce electricity that they can sell at market, rather than regulated, rates.
About a decade ago, the big talk in the utility business was about tossing off the yoke of public service commissions, getting away from steady but modest regulated returns and becoming independent or "merchant" power companies selling electricity to hungry grids that would pay steep prices.
A photovoltaic power station, also known as a solar park, is a large-scale photovoltaic system (PV system) designed for the supply of merchant power into the electricity grid.
The disclosure of the memorandums last week prompted Gov. Gray Davis and other California officials to claim vindication for their assertion that scheming by energy merchants had driven up electricity prices by billions of dollars.
That's when they realized they could switch to a cryptocurrency and allow payments across a peer-to-peer network for merchants, offering airtime, data, electricity bills — even the ability to pay school fees.
So Aquila may provide the gas to power a so-called merchant plant, one that produces electricity to sell in the market, in return for a claim on its production.
For merchant solar power stations, where the electricity is being sold into the electricity transmission network, the levelised cost of solar energy will need to match the wholesale electricity price.
For businesses, Tapp's main partners are merchants, such as insurance and electricity companies.
