One of the biggest obstacles to understanding how the electricity industry works is the prevalence of technical jargon. The use of unfamiliar terms and specialized language makes learning about this complex industry all the more challenging. Two terms that are frequently used and frequently misunderstood are “capacity” and “energy.”
“Capacity” refers to the maximum amount of electricity that a generating unit can produce. It is measured in megawatts. The electricity that is actually produced and delivered to consumers is called “energy” and is measured in megawatt-hours.
Energy production will fluctuate depending on consumers’ electricity use. On a cool spring night, for example, when most people are asleep and their lights and other electronics are turned off, the number of megawatt-hours consumed will be relatively low. In contrast, on a hot July afternoon when air conditioners are running full blast, the number of megawatt-hours consumed will be substantially higher.
In order to maintain reliability, PJM must make sure that there will always be enough electricity no matter what the season or time of day. Therefore, the combined capacity of all the resources available to PJM must be sufficient to match the needs at any given time of the more than 60 million people living in the region. PJM’s total capacity as of the end of 2012 was 185,600 MW.
In summary, capacity is the amount of electricity that the system is capable of delivering, and energy is the amount that is actually produced and used. While capacity remains relatively stable, energy fluctuates minute-to-minute in response to consumers’ electricity use. For more information on this topic, please visit the PJM Learning Center.