Capture Curves

Overview

A capture curve illustrates how the value of renewable energy compares to the average value of electricity in the market over time. Because solar and wind are intermittent resources, they only generate during certain hours, rather than evenly throughout the day like dispatchable or baseload resources. This means their value is weighted toward the price at those specific hours, which may differ from the times of highest market prices.

Comparing the market price to the prices when solar or wind generates gives us a capture rate. Displaying that capture rate over time is called a capture curve. By measuring capture rates over time, we can visualize how solar and wind are expected to change in value as the grid evolves over the next 15+ years, factoring in market conditions such as renewable penetration and energy storage buildout.

How Capture Curves Are Calculated

Calculation steps:

1. Hourly Price Forecast - Every day, we simulate a new hourly price forecast for each settlement point in ERCOT and PJM. To learn more about this methodology, see here.
2. Project Generation - The amount of power produced by a given resource (in this case, solar or wind) in each hour. This is provided via standard generation profiles.
3. Project Revenue – Multiply the project's expected hourly generation by the hourly prices, then sum the results over the desired period.
4. Generation-Weighted Value - The average price for a MWh generated by the project. To derive this, divide the project revenue by the project's generation.
5. Average Market Price – Take the average of all hourly prices over the same period (24/7, also known as ATC or around-the-clock value).
6. Capture Rate – Divide the project’s generation-weighted value by the average market price.

For a practical example, look at the data from ERCOT North Hub on August 14, 2025:

The average price of power throughout the day was $31.90, but the hours when solar was generating were mostly at or below that average.

After multiplying the total solar generation in each hour by the price at that hour, we find that the generation-weighted solar value was $30.44.

The capture rate is therefore 31.90 / 30.44 = 95%.

In other words, this means that solar "captured" 95% of the average market price.

Why Capture Curves Matter

Originators and analysts use capture curves to:

• Assess risk: As renewable penetration increases, prices during peak generation hours may fall, lowering capture rates. Conversely, as load grows, there may be inflation on midday pricing, raising capture rates.
• Evaluate revenue potential: Estimate whether a proposed PPA price is competitive.
• Test market scenarios: See how different sensitivities of renewable penetration, battery storage penetration, or load growth impact the value of solar and wind over time.