Capacity Market

A Capacity Market is a system used by some electricity grids to ensure there's always enough power to meet demand. Power providers commit to having a certain amount of electricity available, especially during high usage times, and in return, they are paid for being ready to supply it. This encourages investment in reliable power sources and helps prevent blackouts. Essentially, it’s a financial incentive for generators to maintain sufficient capacity, ensuring the grid remains stable and reliable even when demand peaks.