Capacity vs Generation

Two of the biggest misconstrued concepts about electricity are capacity and generation. Just because renewables made up 78% of utility-scale capacity installed in 2020 and will continue to make up large amounts of utility-scale capacity in the future, this does not mean that capacity and generation are equal. Generator capacity is the maximum output, commonly expressed in megawatts (MW), that generating equipment can supply to system load, adjusted for ambient conditions. Generator generation is the gross amount of electric energy produced by the generating unit, commonly expressed in megawatt hours (MWh). The Energy Information Administration (EIA) sends out surveys to producers and consumers. Two such surveys of interest for the discussion of capacity and generation are Form EIA-923 and Form EIA-860. Form EIA-860 collects generator-level specific information about existing and planned generators and associated environmental equipment at electric power plants with 1 MW or greater of combined nameplate capacity. Form EIA-923 collects detailed electric power data, monthly and annually, on electricity generation, fuel consumption, fossil fuel stocks, and receipts at the power plant and prime mover level. A better approximation of the generation of a generating unit is net generation, which is the amount of gross generation less the electrical energy consumed at the generating station(s) for station service or auxiliaries. Net generation is therefore the amount of electricity that is actually being sent to the grid for you and me to use. Looking at data through 2020, the capacity in the U.S. shows the following:

Natural gas, coal, nuclear, and wind are the front-runners for total capacity. However, when we look at net generation, the picture changes:

Natural gas comprises less of the total net generation than capacity, and coal comprises the same net generation and capacity. Nuclear comprises more net generation than capacity, and wind comprises less net generation than capacity. The picture becomes even clearer when capacity and net generation are compared side by side as a percent of total.

We absolutely need to transition to a cleaner future with renewables, but we need to remember that capacity is not equal to generation.