Generation Capacity

Key takeaways

• Generation capacity is the maximum amount of electricity a plant (or the whole fleet) can produce — usually quoted in MW or GW.
• Capacity is the ceiling — actual output depends on demand, weather (for renewables) and plant availability.
• The Capacity Market pays generators and demand-side providers to be available when GB needs them most.

What is generation capacity?

Generation capacity is the rated maximum power a generator can produce continuously, normally expressed in megawatts (MW) or gigawatts (GW). Fleet-wide capacity is the sum across all connected generators.

Capacity differs from generation output — capacity is the ceiling; output is how much that capacity actually produced over a period. A wind farm of 100 MW capacity can output anywhere from near zero to near 100 MW depending on wind.

Why capacity matters for bills

GB uses a Capacity Market to pay generators and demand-side providers to be available at peak — a cost ultimately recovered from suppliers and passed through to bills.

At tight margins, capacity availability drives the marginal price up in day-ahead and balancing markets.

Sources

1. NESO — Capacity Market (EMR delivery body)
2. NESO — National Energy System Operator (Britain’s electricity system operator)
3. GOV.UK — Department for Energy Security and Net Zero (DESNZ)