Capacity credit
The fraction of a resource’s nameplate capacity that can be counted on to meet peak demand, used in adequacy planning and capacity markets.
Capacity credit (also capacity value or effective load-carrying capability, ELCC) expresses how much firm capacity a resource contributes to system reliability, as a percentage of its nameplate rating. It is distinct from capacity factor, which measures average output.
The most rigorous method is ELCC: the amount of additional constant load the system can serve, at the same loss-of-load expectation, after adding the resource.
Indicative values:
- Gas, coal, nuclear: 80 to 95% (limited by forced outages and cold-weather failures).
- Onshore wind: 5 to 30%, depending on correlation with peaks; offshore somewhat higher.
- Solar PV: 30 to 60% in summer-afternoon-peaking systems at low penetration, falling to under 10% as peaks shift to evening; near zero in winter-peaking northern Europe.
- 4-hour batteries: 70 to 95% initially, declining as net peaks lengthen.
Capacity credit falls as penetration rises because each new MW of a correlated resource shifts the net peak to hours when that resource is unavailable. PJM's ELCC ratings for the 2025/26 auction gave fixed-tilt solar under 10%, onshore wind around 35 to 40% and 4-hour storage under 60%. Great Britain's capacity market applies similar derating factors. See also reserve margin.
Related terms
All terms →- Reserve margin
The amount by which available or accredited capacity exceeds forecast peak demand, expressed as a percentage of peak.
- Capacity market
A mechanism that pays resources for being available to supply power or reduce demand at times of system stress, alongside payments for energy.
- Capacity factor
The ratio of the energy a power plant actually produces over a period to the energy it would produce running at full nameplate capacity for the whole period.
- Variable renewable energy (VRE)
Renewable generation whose output varies with weather and time of day, mainly wind and solar PV, and cannot be fully dispatched.
- Dispatchable generation
Generation whose output can be scheduled, raised or lowered on request by the operator, independently of weather.
- Peak load
The highest electricity demand recorded on a grid during a given period, which sets the capacity the system must be able to supply.