This indicator measures the difference between available generation capacity and expected peak load (reserve margin). Low reserve margins or tight capacity conditions can signal greater risk of price spikes or reliability issues.
Why it matters
Reserve margins provide a bu
ffer against unexpected demand surges or generation outages. When margins shrink, system operators may call on higher‑cost resources or imports, impacting prices and reliability.
Interpreting signals
- Green: Reserve margins are comfortably above planning targets, indicating ample capacity.
- Yellow: Margins are narrowing toward target levels, suggesting potential stress during peak periods.
- Red: Margins fall below targets or capacity conditions are tight, increasing the likelihood of shortages, higher prices, or emergency measures.
Sources
ISO/RTO seasonal resource adequacy assessments and capacity reports.
Status: Yellow – Caution: Reserve margins are narrowing toward target levels, suggesting potential stress during peak periods.
