Capacity Credit

This guide from the Stockholm Environment Institute defines 'capacity credit' within the context of energy system modeling, explaining how it affects the calculation of module reserve margins and the addition of endogenous capacity.

• Capacity credit is the portion of a process's rated capacity that is treated as firm when calculating the module reserve margin. For thermal power plants, this value typically does not exceed the average annual Maximum Availability, while intermittent renewable plants often have lower values. Some sources, such as imported electricity, may have a capacity credit of zero.
• When specifying endogenous capacity, it is necessary for at least some plants in a module to have a capacity credit above zero. This is because endogenous capacity is added to meet a planning reserve margin, and plants with zero capacity credit do not contribute to that margin.
• As a first-order approximation, the capacity credit for a renewable plant can be calculated as the ratio of that plant's availability compared to the availability of a standard thermal plant.

APA

Stockholm Environment Institute (n.d.). Capacity Credit. https://leap.sei.org/help24/Transformation/Capacity_Value.htm

Chicago

Stockholm Environment Institute. Capacity Credit. n.d. https://leap.sei.org/help24/Transformation/Capacity_Value.htm.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Capacity Credit |url=https://leap.sei.org/help24/Transformation/Capacity_Value.htm |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitutendcapacity, author = {{Stockholm Environment Institute}}, title = {{Capacity Credit}}, institution = {Stockholm Environment Institute}, url = {https://leap.sei.org/help24/Transformation/Capacity_Value.htm}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }