California ISO

The maximum amount of power an energy source can physically produce (measured in megawatts/MW), or when referring to an electrical grid, the total amount of electricity that power plants connected to the grid are capable of producing. It’s essentially the total potential output of all the electricity sources, like coal, nuclear, hydro, wind, and solar plants. Meanwhile, energy is the actual output of a source over a particular time period. 

• Capacity accreditation – The process by which grid operators determine the reliability contribution of individual power resources (such as power plants or energy storage systems) to the overall electricity grid. It quantifies how much a resource can reliably contribute to meeting demand, especially during peak times or periods of tight supply, guiding investment decisions for grid stability.
• Capacity auction – A competitive market mechanism where grid operators or utilities purchase energy in the market from electricity generators (such as coal plants, wind, and solar farms) or demand-response participants for future energy needs. Essentially, the generators or demand-response entities provide their energy or technology for future periods of high demand. Capacity market auctions ensure enough electricity is available for future demand at the lowest achievable price for consumers. The goal is to balance reliability with cost by having market participants compete. There are two main types of auctions:
  • Forward capacity auctions: held years before the capacity is needed, giving operators time to upgrade or build facilities. 
  • Incremental auctions: take place closer to the delivery time, adjusting for changes in demand or unexpected generator issues.  

Generally, participants submit sealed bids to offer capacity at specific prices. The auction ends when the total capacity offered matches the region’s needs, and a single clearing price is set for all commitments.  

• Capacity costs – The charges associated with ensuring a sufficient supply of power to meet peak demand. These charges cover the cost of maintaining and operating power plants, transmission infrastructure, and other components needed to meet the highest levels of electricity usage, essentially guaranteeing power is available when it’s most needed.
• Capacity market – A type of wholesale market designed to ensure there will be enough power generation available in the future to meet peak demand and maintain grid reliability. Generators receive payments for promising to be available to produce electricity when needed, even if they aren’t running all the time. Functions sort of like an insurance policy, in that generators are paid for the promise to show up with power during times of high demand. This type of market is a method to maintain resource adequacy. Not all markets use this method (example: Electric Reliability Council of Texas (ERCOT).

An energy source that generates electricity with zero- or extremely low-carbon emissions, and can do so when needed, regardless of weather conditions. They include enhanced geothermal energy and advanced nuclear technologies. They also can include solar or wind paired with battery storage to provide on-demand power supply regardless of weather conditions or time of day. 

Refers to a regulatory approach for connecting new power generators to the electrical grid, notably used in Texas (ERCOT). This approach allows new generators to connect expeditiously with minimal upfront transmission upgrades. However, the grid operator retains the right to curtail their output if transmission constraints arise. This contrasts with approaches where developers pay for upgrades prior to connection. (see Energy-only interconnection approaches)

An accelerated stakeholder process used in PJM Interconnection to resolve urgent, contentious, and time-sensitive issues that cannot be resolved through the normal stakeholder process. The process involves several stages of discussion and proposal development, culminating in a submission to the Federal Energy Regulatory Commission (FERC) for approval. The CIFP process has been used in recent years to discuss large load additions (2025) and resource adequacy (2023).

The process of creating electricity. 

Heat derived from the Earth’s interior, which can be harnessed for electricity generation. It’s a renewable resource, as the Earth’s internal heat is continuously replenished.

The electrical grid is a vast, interconnected network comprising power plants, transmission lines, substations, and distribution lines. Its purpose is to generate, transmit, and deliver electricity from producers to consumers across a wide geographic area. 

A variety of technologies that improve the capacity, efficiency, and reliability of existing power grids. They are often lower cost and faster to deploy than major grid infrastructure upgrades like building new transmission lines. These technologies optimize the flow of electricity across existing infrastructure.

Refers to the ability of an inverter to synchronize with frequency and voltage on the grid. These are more common than grid forming and refer to how this technology takes its cues from the grid, not the other way around.

Refers to the ability of an inverter to actively control frequency and voltage on the grid, helping to ensure grid stability. They can provide ancillary services, such as inertia, voltage regulation, and frequency response, essential for maintaining grid stability.

Refers to the many solutions that help the grid withstand major events, such as extreme weather, natural disasters, or cyber attacks, without disruption.

Fuel cell that carries energy generated from another source. It can be used in fuel cells to generate electricity with water as the only byproduct, or it can be burned for heat. Hydrogen can be produced from a variety of sources–renewable energy such as solar or wind, or gas plants, nuclear, and other energy sources–which dictate whether it can be considered “clean” or not.

For electricity infrastructure, like power lines and generating facilities, these requirements involve a range of considerations, including safety, environmental impact, and community engagement. Specific regulations vary by location and project type, but generally include distance requirements from existing infrastructure, environmental assessments, and engagement with landowners and stakeholders.

The conversion of sunlight into electricity using photovoltaics (PV) or solar thermal technologies. It’s a renewable energy source that is becoming increasingly important in the global energy landscape due to its sustainability and decreasing costs.

Refers to the real-time wholesale cost of electricity that fluctuates based on supply, demand, weather, and grid conditions.

Southwest Power Pool

Generators with turbines rotating in sync with the grid frequency. They include large-scale thermal (coal and gas) and hydropower plants.

A type of power station in which the heat energy generated from various fuel sources (e.g., coal, natural gas, nuclear fuel, etc.) is converted to electrical energy.

The maximum amount of electrical power that can be reliably moved from one geographic region of the power grid to another, essentially indicating the ability of the transmission lines connecting those regions to transport electricity between them without causing instability or exceeding safety limits. It’s a crucial concept for ensuring the safe and efficient operation of the power system, particularly in the context of electricity markets and grid planning.