Capacity markets are the backbone of today’s energy grid. At a time of surging load growth and excess demand, the ability to support peak demand is now more vital than ever.
At Noreva, you can merge fundamentals, transactional insights and AI-driven modeling to deliver key market insights and create forecasts you can trust.
Capacity has become mission-critical in energy markets. What was once considered a marginal cost driver now influences multi-million-dollar decisions per megawatt-hour during peak demand.
Capacity auction results directly shape financing and hedging strategies, and predicting auction clearing prices is critical for developers and investors. In short, capacity is a professionals’ market: only those with credible insights can navigate its complexity with confidence.
Project Finance
Access to capacity revenues determines whether assets are profitable: a process that requires rigorous Valuation & Modeling to withstand scrutiny from lenders and investors.
Asset Performance
Accurate capacity views can unlock hidden margins or protect operators and investors from severe downside risks.
System Reliability
Capacity markets ensure that adequate resources are available during critical periods, from summer heatwaves to winter freezes.
Long-term Adequacy
Capacity prices send the signals that guide investment into new infrastructure.
Noreva provides forward-looking capacity forecasts, a comprehensive lens across North American capacity markets, capturing both regional and seasonal dynamics. This breadth of coverage addresses one of the most frequent investor inquiries: identifying a single, credible provider for capacity forecasts in every regional market.
Our datasets go deeper, with seasonal splits (summer vs winter and more) and unique market specific dynamics to capture how weather, demand, transmission constraints and infrastructure availability shape pricing & resource adequacy.
PJM
MISO
NYISO
ISO-NE
SPP
CAISO
Our approach integrates capacity market data directly into valuation, origination, and risk models, ensuring forecasts are actionable for trading and financing decisions.
Behind every forecast is a proprietary, fundamentals-aligned modeling framework. We don’t just extrapolate trends — we reconstruct the full picture by linking real-world transaction insights, market fundamentals, and policy-driven signals into a cohesive system. This methodology ensures that outputs are not only quantitatively rigorous but also qualitatively credible with investors, boards, and regulators.
Our capacity models are powered by a rich array of data sources, including:
What sets Noreva apart is the way we merge dynamic datasets with code-enabled analysis. Every assumption is stress-tested, and every scenario reflects both short-term market signals and long-term structural drivers.
The result: multiple distinct capacity market scenarios, ranging from conservative to aggressive builds, offering our clients a 360° perspective on possible futures. This multi-scenario approach allows stakeholders to align on strategy while remaining agile in the face of uncertainty.
All capacity forecasts and auction datasets are delivered through API, CSV downloads, and the Noreva Data Hub. Our auction datasets include clearing price forecasts, accredited capacity, reserve margins, and seasonal splits, enabling investors to validate revenue streams and lenders to benchmark assumptions.
This flexibility allows clients to integrate Noreva inputs directly into valuation models, risk systems, or compliance workflows, ensuring that insights are both actionable and operationally efficient.
At Noreva, capacity forecasts are built to stand up to scrutiny, whether from internal risk committees, external lenders, or investor boards. Our methodology balances market fundamentals, policy signals, and AI-powered scenario testing to produce outlooks that are not only technically rigorous, but also credible where it matters most: financing and strategic decision-making.
Noreva’s outlooks combine near-term capacity auction forecasts with long-term merchant curve scenarios across all major ISOs — data accessible through our Capacity Merchant Curves Forecasts and Capacity Pricing Data Service.
The short horizon is where execution matters. The next five years tether revenue expectations, hedge optimizations and risk planning to today’s liquid markets.
Looking out twenty-five years, capacity forecasts shift from tactical execution to strategic positioning. This horizon is critical for:
Noreva’s curves cut through market noise by employing a multi-scenario approach that addresses the divergence between market fundamentals and current market dynamics. By combining market fundamentals—assessing shifts in policy, fuel economics, and technology—with transaction-based insights, Noreva provides a reliable curve tethered to proven market conditions.
The Southwest Power Pool (SPP) illustrates how capacity markets evolve under shifting regulatory, seasonal, and resource mix conditions. As a less mature market, SPP continues to refine market constructs to ensure resource adequacy in both the short- and long-term horizons as adequacy rules tighten.
Capacity value depends on how resources are accredited. In SPP, the move to Performance-Based Accreditation (PBA) and Effective Load-Carrying Capability (ELCC) has transformed the rules of the game:
Capacity prices in SPP show sharp seasonal contrasts:
These seasonal asymmetries underscore why granular, zonal capacity views matter more than headline averages.
SPP sets Planning Reserve Margins (PRMs) to ensure system reliability under stress. Based on a Loss of Load Expectation (LOLE) of 1 day in 10 years, PRMs reflect seasonal needs:
This mechanism ensures that adequacy is not theoretical — it is quantified and enforced.
Capacity forecasts only matter when they translate into better client outcomes. With Noreva, outputs flow directly into:
In short, Noreva connects the dots from raw capacity signals to boardroom-ready intelligence. Preparing for capacity auctions requires more than historical data. Noreva supports:
Noreva’s capacity datasets flow directly into commercial decisions:
A developer within PJM is assessing whether capacity revenues will meet an adequate Debt Service Coverage Ratio (DSCR) for financing.
In a 150 MW solar + 100 MW / 400 MWh storage project, Noreva’s merchant curves are used to validate capacity revenue streams under base, low, and high price scenarios.
By integrating these forecasts into the project’s financial model, the lender applies a –15% haircut to capacity prices to account for market risk, while confirming that the DSCR remains within covenant thresholds.
Outcome: the project demonstrates resilience under all modeled cases, enabling the developer to finalize the PPA strike price and capacity auction strategy with confidence.
“Energy markets have outgrown fuel-driven swings - today, they price the structure of the grid itself. REC and capacity signals are increasingly linked to energy volatility, reflecting how renewable integration and resource adequacy are converging as a value system. Power pricing has evolved from an indicator of fuel spreads into a measure of policy, technology mix, and grid reliability.”
Malachi ColemanAssociate
Capacity markets secure future reliability by ensuring enough resources are available at peak times, while power markets cover real-time or day-ahead energy needs.
Because lenders and boards require credible forward views of future revenue streams. Reliable forecasts can make or break project approvals.
By blending fundamentals, regulatory changes, and trading dynamics with AI-powered scenario testing — every forecast is anchored in real market signals.
Noreva covers all major US ISOs/RTOs, including PJM, CAOSO, MISO, NYISO, ISO-NE, and SPP, with seasonal and regional splits.
They inform bid strategies, hedge timing, asset development plans, and valuations, turning uncertainty into measurable risk.
By combining fundamentals, policy shifts, and traded data, Noreva models forward auction clearing prices under multiple scenarios.
Book a demo to see the platform in action or speak directly with an analyst about your specific use-case.
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