The capacity factor for a facility that generates electricity may be the most important attribute that you have never heard of. Capacity factors measure how intensively a generating unit runs. It is defined as the ratio of the actual electrical energy of a facility over a specific period (usually a year) to its maximum possible electrical energy that could have been produced if the generator operated at continuous full power The capacity factor is typically expressed as a percentage. The capacity factor of 100% means a generating unit is operating all of the time.1
Nuclear power plants have the highest capacity factors among all utility-scale generation sources in the United States, averaging more than 90% in recent years. Nuclear’s high capacity factor results from their ability to operate continuously for long periods, up to 18 to 24 months, before they need to be shut down for refueling and maintenance. Power plants powered by coal and natural gas have much higher maintenance needs and thus need more shutdown time.
Wind (35%) and solar photovoltaic (25%) plants have much lower capacity factors due to the intermittency of the wind and solar resources. Over a day, week, month, and year, solar and wind energy vary dramatically, and significant periods of unavailability lead to a low capacity. Similarly, hydropower has a relatively low capacity factor because the hydroelectric resource potential depends on a combination of rainwater draining directly into waterways and the level of accumulated snowpack in mountainous regions that eventually melt and become runoff.2
The low capacity factors for natural gas turbines and oil-fired internal combustion engines are due to their role as “peaking” power plants. These plants sit idle most of the time. They typically operate during the hours of the highest daily, weekly, or seasonal loads, such as a summer heat wave.
Capacity factors help explain the role that different generations of sources play in electric power grids. Nuclear, coal, and natural gas combined cycle plants historically serve what is known as the “base load”: the minimum amount of electric power delivered or required over a given period at a steady rate. Baseload power plants must be able to supply electricity at a constant rate, usually at a low cost relative to other generation facilities available to the grid.
Renewable sources such as wind and solar historically were not treated as baseload power sources due to their low capacity factors. But this view is shifting for several reasons. Better electricity transmission capacity can link geographically distributed sources of renewable energy and thereby reduce aggregate intermittency. Rapid advances in utility-scale battery storage can fill the gaps that might occur between electricity demand and the supply from intermittent energy sources. Combining storage with a combination of renewable sources, including rooftop solar PV, can provide effective caseload power. For example, solar and wind power generated 22% of Europe’s electricity in 2022, for the first time overtaking natural gas (20%), and remaining above coal power (16%).3 This suggests that the historical notion of baseload power, which refers to coal and nuclear energy, is outdated.
The annual variation in capacity factors for nuclear, coal, and combined cycle natural gas reflect seasonal variations in electricity demand. Capacity factors for those sources fall in the spring and fall “shoulder” seasons when electricity demand is generally lower. Capacity factors rise in the summer when air conditioning increases the demand for electricity.
Climate change is altering these historic patterns. In cold regions of the country, the electrification of heating will raise the demand for electricity in the winter months relative to the historical pattern. Higher and more extreme temperatures in the summer will increase peak demand for electricity. Drought will alter the availability of water supply for hydroelectric generation. These and other changes will move our electricity system into uncharted territory.
1 U.S. Energy Information Administration, “EIA expands data on capacity and usage of power plants, electricity storage systems,” February 28, 2020, https://www.eia.gov/todayinenergy/detail.php?id=42995
2 U.S. Energy Information Administration, “U.S. hydropower output varies dramatically from year to year,” August 15, 2011, https://www.eia.gov/todayinenergy/detail.php?id=2650
3 Ember, “European Electricity Review 2023,” Link
