Category: 📘 Glossary & Acronyms
Capacity Auction
A market mechanism used to procure electricity resources capable of supplying capacity to meet future electricity demand.
A capacity auction is used to secure sufficient electricity resources to ensure that the electricity system can meet peak demand in future years.
Participants in a capacity auction may include:
These participants compete to provide capacity commitments for future periods.
Electricity markets typically include both energy and capacity components.
| Market Type | Purpose |
|---|---|
| Energy Market | Pays generators for electricity produced |
| Capacity Market | Pays resources for being available to supply electricity |
Capacity auctions focus on ensuring that enough resources will be available to meet future demand rather than paying for electricity production itself.
Last Updated: YYYY-MM-DD