{"id":12683,"date":"2026-09-23T13:18:19","date_gmt":"2026-09-23T11:18:19","guid":{"rendered":"https:\/\/be-storaged.de\/nicht-kategorisiert\/capacity-market-vs-energy-only-market\/"},"modified":"2026-10-19T14:36:43","modified_gmt":"2026-10-19T12:36:43","slug":"capacity-market-vs-energy-only-market","status":"publish","type":"post","link":"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/","title":{"rendered":"Capacity Market vs. Energy-Only Market"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The capacity market and the energy market are <strong>two different market models designed to ensure the supply of electricity<\/strong>. While the energy market compensates only for the energy actually delivered, the capacity market provides additional compensation for the provision of capacity. The discussion surrounding both models is closely linked to issues of supply security, the energy transition, and the increasing volatility of renewable energy sources.  <\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Definition-of-terms\" >Definition of terms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Energy-Market-Energy-Only-Market\" >Energy Market (Energy-Only Market)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Capacity-Market\" >Capacity Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Differences-Between-the-Capacity-Market-and-the-Energy-Market\" >Differences Between the Capacity Market and the Energy Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#The-Role-of-Renewable-Energy\" >The Role of Renewable Energy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Impact-on-Electricity-Prices-and-Security-of-Supply\" >Impact on Electricity Prices and Security of Supply<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Relevance-for-companies\" >Relevance for companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Relationship-to-Flexibility-and-Storage\" >Relationship to Flexibility and Storage<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Distinction-from-related-terms\" >Distinction from related terms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/be-storaged.de\/en\/wiki\/i-j-k-l\/capacity-market-vs-energy-only-market\/#Summary\" >Summary<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definition-of-terms\"><\/span>Definition of terms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The <strong>energy market<\/strong> is a market model in which payment is made exclusively for the electrical energy that is actually generated and supplied. It is therefore also referred to as an &#8220;energy-only&#8221; market. <\/p>\n\n<p class=\"wp-block-paragraph\">The <strong>capacity market<\/strong> supplements the energy market by providing compensation for the mere provision of generation capacity. Power plants or flexible facilities receive payments for being available when needed, regardless of whether they actually supply electricity. <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Energy-Market-Energy-Only-Market\"><\/span>Energy Market (Energy-Only Market)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">In the energy market, revenue is generated <strong>exclusively through the sale of electricity on exchanges or through bilateral contracts<\/strong>. Key features include: <\/p>\n\n<ul class=\"wp-block-list\">\n<li>Pricing Based on Supply and Demand<\/li>\n\n\n\n<li>Order of deployment according to the merit-order principle<\/li>\n\n\n\n<li>Revenue is generated only when electricity is actually delivered<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">In Germany, the energy market forms the foundation of the electricity system. Exchanges\u2014such as those for day-ahead and intraday trading (e.g., EPEX SPOT)\u2014are central trading venues in this model. <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capacity-Market\"><\/span>Capacity Market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">In the capacity market, plant operators receive <strong>a payment for providing capacity in addition to their energy compensation<\/strong>. The goal is to ensure that sufficient controllable capacity is available at all times to offset peak loads or generation outages. <\/p>\n\n<p class=\"wp-block-paragraph\">Typical characteristics of a capacity market include:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Rewarding a Willingness to Perform<\/li>\n\n\n\n<li>Long-Term Planning Certainty for Plant Operators<\/li>\n\n\n\n<li>Politically and Regulatorily Driven Design<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">In some countries, capacity markets are used as <strong>a supplement to or alternative for the energy market<\/strong>.<\/p>\n\n<p class=\"wp-block-paragraph\">There is currently no comprehensive capacity market in the German electricity system. <strong>Germany continues to rely on the \u201cenergy-only\u201d market as its central market design. <\/strong>However, to ensure security of supply, this model is supplemented by additional instruments, in particular the <strong>capacity reserve<\/strong> and the <strong>strategic reserve<\/strong>. These mechanisms ensure that generation capacity is maintained for exceptional situations without replacing the fundamental market mechanism of the energy market. <\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Differences-Between-the-Capacity-Market-and-the-Energy-Market\"><\/span>Differences Between the Capacity Market and the Energy Market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The key differences can be summarized as follows:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>The energy market pays for energy; the capacity market pays for capacity<\/li>\n\n\n\n<li>In the energy market, revenue is generated only through electricity generation<\/li>\n\n\n\n<li>In the capacity market, revenue is generated even without actual power generation<\/li>\n\n\n\n<li>The energy market relies more heavily on price signals, while the capacity market relies on regulatory safeguards<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">Both models aim to ensure security of supply, but use different mechanisms.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The-Role-of-Renewable-Energy\"><\/span>The Role of Renewable Energy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The growing share of renewable energy is changing the demands placed on the electricity market. The generation of renewable energy depends on weather conditions, which is why additional flexibility and reliable power are becoming increasingly important <\/p>\n\n<p class=\"wp-block-paragraph\">This leads to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>greater volatility in electricity prices<\/li>\n\n\n\n<li>the growing importance of flexible, controllable capacity<\/li>\n\n\n\n<li>Discussions on the Need for Additional Capacity Mechanisms<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">In this context, the capacity market is often viewed as a potential tool for securing the system.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-Electricity-Prices-and-Security-of-Supply\"><\/span>Impact on Electricity Prices and Security of Supply<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">In the energy market, high prices during periods of scarcity can provide incentives to invest in new capacity. Critics, however, see a risk that these price signals may not be sufficient to ensure long-term security of supply. <\/p>\n\n<p class=\"wp-block-paragraph\">Capacity markets are intended to reduce this risk, but they may:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>incur additional costs<\/li>\n\n\n\n<li>Step up market interventions<\/li>\n\n\n\n<li>Creating perverse incentives if they are not designed with precision<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">The structure of the market design is therefore crucial.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relevance-for-companies\"><\/span>Relevance for companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">For companies, the distinction between the capacity market and the energy market is important because:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Influenced by Electricity Prices and Price Volatility<\/li>\n\n\n\n<li>Shapes investment decisions in the energy system<\/li>\n\n\n\n<li>determines the economic value of flexibility<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">Companies with generation facilities, storage facilities, or controllable loads are particularly affected, as their facilities can potentially play different roles in both market models.<\/p>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relationship-to-Flexibility-and-Storage\"><\/span>Relationship to Flexibility and Storage<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">Flexibility plays an important role in both market models. Energy storage systems, flexible consumers, and controllable generation facilities can: <\/p>\n\n<ul class=\"wp-block-list\">\n<li>Taking Advantage of Price Signals in the Energy Market<\/li>\n\n\n\n<li>Supporting Security of Supply<\/li>\n\n\n\n<li>Provide capacity on short notice<\/li>\n<\/ul>\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p class=\"wp-block-paragraph\">Therefore, there are close connections to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/e-f-g-h\/flexibility-markets\/\" data-type=\"post\" data-id=\"11175\">Flexibility Markets<\/a><\/li>\n\n\n\n<li>Grid-supportive storage control<\/li>\n\n\n\n<li>Load shifting through storage<\/li>\n\n\n\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/a-b-c-d\/demand-side-management-dsm\/\" data-type=\"post\" data-id=\"11053\">Demand Side Management (DSM)<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/q-r-s-t\/control-energy-stabilizing-the-power-grid-in-the-event-of-fluctuations\/\" data-type=\"post\" data-id=\"5026\">Control energy<\/a><\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Distinction-from-related-terms\"><\/span>Distinction from related terms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">Not to be confused with:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Control Energy: Short-Term Compensation for Frequency Deviations<\/li>\n\n\n\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/q-r-s-t\/secondary-control-reserve-srl\/\" data-type=\"post\" data-id=\"5029\">Secondary Control Power (SRL)<\/a> and <a href=\"https:\/\/be-storaged.de\/en\/wiki\/q-r-s-t\/tertiary-control-power-trl\/\" data-type=\"post\" data-id=\"5545\">Tertiary Control Power (TRL)<\/a>: Submarkets for Control Energy<\/li>\n\n\n\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/m-n-o-p\/grid-fees-and-surcharges\/\" data-type=\"post\" data-id=\"11063\">Grid Fees and Surcharges<\/a>: Regulated Components of the Electricity Price<\/li>\n\n\n\n<li><a href=\"https:\/\/be-storaged.de\/en\/wiki\/e-f-g-h\/congestion-management-in-the-power-grid\/\" data-type=\"post\" data-id=\"8776\">Congestion Management in the Electric Power Grid<\/a>: Grid-Side Measures to Prevent Overload<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary\"><\/span>Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<p class=\"wp-block-paragraph\">The capacity market and the energy market are two <strong>different approaches to organizing the electricity supply<\/strong>. While the<strong> energy market relies on price signals and compensation for energy actually delivered <\/strong>, the <strong>capacity market<\/strong> supplements <strong>this model with payments for the provision of capacity<\/strong>. With the growing share of renewable energy, the discussion about ensuring long-term security of supply is gaining importance. For companies, plant operators, and flexible consumers, the interplay between these two models is relevant, as it significantly influences electricity prices, investment incentives, and the economic value of flexibility.   <\/p>\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The capacity market and the energy market are two different market models designed to ensure the supply of electricity. While the energy market compensates only for the energy actually delivered, the capacity market provides additional compensation for the provision of capacity. The discussion surrounding both models is closely linked to issues of supply security, the [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_links_to":"","_links_to_type":0,"footnotes":""},"categories":[105,102],"tags":[],"class_list":["post-12683","post","type-post","status-publish","format-standard","hentry","category-i-j-k-l","category-wiki"],"acf":[],"_links":{"self":[{"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/posts\/12683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/comments?post=12683"}],"version-history":[{"count":1,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/posts\/12683\/revisions"}],"predecessor-version":[{"id":12684,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/posts\/12683\/revisions\/12684"}],"wp:attachment":[{"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/media?parent=12683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/categories?post=12683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/be-storaged.de\/en\/wp-json\/wp\/v2\/tags?post=12683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}