- PJM – Reliability Pricing Model, annual Base Residual Auction. Capacity Performance for year-round availability.
- ISO-NE – Forward Capacity Market (FCM), Pay-for-Performance system with bonuses/penalties.
- NYISO – Installed Capacity (ICAP), monthly & seasonal auctions. DR can qualify as Special Case Resources.
- MISO – Planning Resource Auction, ensuring each LSE meets reserve margin. DR resources also accredited.
- California – Resource Adequacy obligations instead of a single capacity auction, DR can be used to meet RA.
- ERCOT – Energy-only market; no central capacity auction, relies on high scarcity pricing for investment.
Capacity Market
Capacity Market Integrations
Capacity markets secure commitments from energy resources during peak demand or grid emergencies. Codibly specializes in integrating batteries, DERs, DR systems, and more—enabling businesses to meet compliance and unlock revenue opportunities.
What Are Capacity Markets?
Unlike energy markets, which focus on real-time energy delivery, capacity markets center on long-term reliability—compensating resources for availability during peak demand.
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Peak Demand Readiness
Resources commit to being operational when the grid needs them most—helping avoid blackouts or shortages.
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Financial Incentives
Resources are compensated for capacity commitments, offering a revenue stream separate from energy market earnings.
Global Capacity Markets Overview
Many energy systems worldwide adopt capacity auctions or mechanisms to ensure reliability. Below is an outline of major capacity markets in North America, Europe (including Hungary and Czech Republic), and Asia-Pacific.
- 1. North America
- 2. Europe
- 3. Hungary & Czech Republic
- 4. Asia-Pacific (Japan, Australia)
Forward capacity auctions (3+ yrs) ensure resource adequacy; DR is eligible.
CA Resource Adequacy is bilateral, while ERCOT remains energy-only (no formal auction).
Capacity auctions or certification ensuring peak availability
CRM schemes (Belgium/Ireland) & mostly energy-only in Germany
- UK Capacity Market – T-4, T-1 auctions. DR, storage can bid. Penalties for non-delivery.
- France – RTE’s capacity mechanism requires suppliers to match peak load with capacity certificates. DR also issues certificates.
- Italy – Terna runs multi-year capacity auctions. DR resources prequalify similarly to generation.
- Poland – Annual TGE auctions ~5 yrs ahead. Generators & DR share capacity obligations.
- Belgium – CRM introduced to secure post-nuclear supply. DR participation is rising.
- Ireland (SEM) – Capacity remuneration mechanism as part of the all-island Single Electricity Market.
- Germany – Primarily energy-only with strategic reserves (AbLaV for interruptible loads), no universal capacity market.
HUPX for day-ahead/intraday, plus strategic reserves for capacity adequacy
OTE runs electricity/ gas markets, with capacity-like reserve programs
- Hungary: While a full capacity market isn’t fully operational, Mavir ensures security of supply via strategic reserves & capacity contracts. HUPX covers energy trades; no broad capacity auction akin to UK or Poland, but DR pilot events have occurred.
- Czech Republic: OTE’s short-term electricity markets include day-ahead, intraday, balancing. For capacity, ČEPS employs reserve procurement, though not a formal forward auction. Some aggregator-led DR & advanced pilot programs for flexibility are emerging.
Capacity market from 2020, 4-year-ahead auctions; DR can bid as negawatts
Energy-only NEM; RERT for emergencies; proposed capacity mechanism under debate
- Japan: OCCTO’s capacity auctions 4 yrs ahead. DR resources join as part of aggregator-based “negawatts”. Complements JEPX for spot trades.
- Australia: NEM relies on scarcity pricing; no universal capacity auction. RERT handles shortfalls. Proposed capacity mechanism aims to support reliability with high renewables penetration.
Codibly’s Expertise in Capacity Market Integration
We integrate diverse energy assets to participate effectively in capacity markets—ensuring compliance, performance optimization, and revenue opportunities.
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1. Battery Energy Storage Systems (BESS)
Rapid response capabilities make BESS ideal for capacity commitments. We handle integration, telemetry, and advanced analytics to maximize dual revenues (capacity + ancillary services).
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2. Distributed Energy Resources (DERs)
We aggregate solar, wind, CHP, etc., into a unified capacity resource. Predictive analytics ensure consistent contributions to capacity obligations.
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3. Demand Response (DR)
Implement DR protocols (OpenADR) to reduce load during peak periods—essential for capacity market participation.
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4. Aggregators
Pool smaller resources (homes, commercial loads) to act as a single capacity asset. We develop control platforms and ensure market compliance.
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5. Vehicle-to-Grid (V2G)
EV fleets can provide grid services via V2G. We integrate OCPP or similar to coordinate charging/discharging for capacity commitments.
Key Markets & Regulations
Each region sets unique rules for capacity participation. We tailor integrations to meet local standards—covering telemetry, compliance, and reporting.
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United States
Focus on PJM, CAISO, ERCOT, each with distinct telemetry & market participation requirements. CA’s Rule 21 can also be relevant when combined with capacity obligations.
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Europe
Capacity markets in the UK, Poland, and other EU countries—frameworks like WIRE, DUB. Emphasis on aggregator & DER integration.
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Asia-Pacific
Capacity initiatives in Japan & Australia—DER, DR, & aggregator rules for advanced renewables-based systems.
Technical Focus
Our capacity market integration services build on deep technical expertise—ensuring assets remain responsive, compliant, and profitable.
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Real-Time Monitoring & Control
Ensure assets are available & responsive to grid operator signals.
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Protocol Implementation
Integration of IEEE 2030.5, OpenADR, MODBUS, & OCPP to streamline data exchange.
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Analytics & Forecasting
Predictive models ensure capacity obligations are met reliably & cost-effectively.
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Cloud-Native Architecture
Scalable, containerized solutions (Kubernetes, Docker) for large-scale participation.
Post-Deployment Support
Integration is the first step. We offer ongoing support to ensure your capacity market assets operate smoothly over the long term.
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Telemetry Management
Maintain reliable data streams to market operators, ensuring compliance & accurate settlements.
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Compliance Audits
Stay aligned with evolving rules by conducting regular checks & updates.
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Performance Optimization
Fine-tune resource scheduling & dispatch to maximize profitability and efficiency.
Why Choose Codibly for Capacity Market Integration?
We bring global expertise, technology-agnostic solutions, and comprehensive services—from initial setup to ongoing optimization.
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Global Expertise
Proven experience with multiple capacity market regions and frameworks (PJM, CAISO, UK, etc.).
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Technology-Agnostic
We tailor integrations to your existing infrastructure, ensuring minimal disruption.
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Comprehensive Support
From initial integration to ongoing optimization, we handle the full lifecycle of capacity market participation.
Ready to Unlock Your Energy Resources in Capacity Markets?
Partner with Codibly to ensure seamless integration, regulatory compliance, and optimized performance. Contact us to learn more!
What our clients say
“We at Charge Solar are thrilled with the enhancements Codibly has brought to our solar calculator tools. Their team not only understood our vision but also delivered a solution that exceeds our expectations in terms of usability, security, and performance. Codibly’s expertise in technology and dedication to sustainability have made them an invaluable partner in our journey to advance renewable energy solutions.”
“I saw value in how flexible Codibly was and in the delivered consulting after the workshops. Codibly explained the trade-offs that would be necessary to save money and time. This is often lacking and helped build trust between us.”
“While there may be several choices in the market for software development vendors, I would strongly recommend considering Codibly if you want a partner who takes a long term approach and offers high standards of professional service.”
“Working closely with Codibly has been instrumental in the successful development of the test tool for OpenADR 3.0. Their expertise and commitment to quality have ensured reliability and effectiveness for the energy industry, and we look forward to continuing our collaborative efforts to advance OpenADR technology.”
“Codibly was more than just a software development company; they were a capable partner who understands the EV industry and helped us push our vision forward.”
“Data analytics and intelligent controls are essential to optimizing advanced energy storage systems, and Codibly helps add this value to our PowerPod system.”
“We have been incredibly impressed by the Codibly team throughout the engagement to date. They have worked hard to understand our priorities and to focus on delivering business value with each feature they develop. The Codibly team is differentiated from the other software development teams we have worked with in the past because they deeply understand the energy domain and so can not only be trusted to deliver high quality software products but also to be a thought partner to our team to ensure we are building the best solution that will help us grow within our market.”
“I highly recommend Codibly for their expertise and business first attitude. Their team consistently meets expectations with their technical proficiency and analytical skills”
“Partnering with Codibly, we aimed to revolutionize renewable energy management in Poland and received more than we hoped for with Re:Poweric. This comprehensive platform not only enhances our market forecasting and maximizes revenue per MWh but also reduces downtime risks, serving a wide range of stakeholders in the renewable energy sector. With features like SCADA+ MultiAsset Management, dynamic market adaptation, and regulatory compliance, Codibly has propelled us to the forefront of renewable energy management, significantly contributing to our mission of advancing sustainable energy use.”
“Codibly’s team brought not just technical expertise but a collaborative approach that was crucial in navigating the complexities of this project. Their ability to integrate seamlessly with our team, adapt to evolving requirements, and consistently deliver high-quality solutions under tight timelines was impressive. Codibly’s commitment to excellence and their deep understanding of the utility sector contributed to the project’s success, enabling us to achieve our goal of transforming our client’s data management and decision support capabilities.”
CASE STUDIES
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CODIBLY WEBINAR
Emerging Trends in Battery Storage: Data, Grids, and Customers
**Recorded on August 1, 2024**: Codibly hosts a webinar featuring Aric Saunders (Advisor, ex-Electriq Power) and Spencer Borison (Head of US at Codibly). They discuss how battery storage underpins renewable energy, focusing on energy management systems, connected devices, VPPs, and demand response.
Learn about the future of storage and renewables, where data, grid interactions, and customer engagement converge to redefine energy efficiency.
Meet our Expert
Jakub Hyla
Managing Director, Renewable Energy Practice Lead
As a Renewable Practice Lead, I lead a business unit focused on developing and delivering innovative solutions in the renewable energy sector. I have a demonstrated history of working in the information technology and services industry, specializing in creating and implementing strategies that drive innovation in energy solutions. As a strong finance professional, I am skilled in team management, negotiation, analytical skills, business process design, and enterprise architecture. I successfully manage finance, administration, legal, and resource management teams.
I am also a Managing Director at Codibly, overseeing strategic initiatives and ensuring the effective execution of projects that support the company’s growth and impact in the renewable energy industry.
Frequently Asked Questions
A primary pain point for VPPs and aggregators is the complex “prequalification” process required to access ancillary markets. Our solution automates the Prequalification Tests required by TSOs, validating that your aggregated portfolio meets the specific response time and duration criteria (e.g., 4-hour availability). We establish the secure, real-time data exchange channels required to pass these audits and enter the market.
We bridge the gap between cloud-native aggregation and utility control centers. To communicate with the TSO, we implement robust industrial protocols like ICCP, IEC 60870-5-104, or DNP3, which are standard for grid operations. Simultaneously, we use OpenADR 2.0b/3.0 to dispatch signals down to your distributed assets, creating a seamless link between the grid operator’s signal and the device’s response.
Yes. Managing settlements for thousands of distributed assets across different regional nodes is a core challenge. The platform we build for you can ingest meter data to calculate Baselines (what would have happened) versus actual performance. It generates the necessary settlement reports to verify your capacity delivery, ensuring you can audit and reconcile payments from the market operator accurately.
We provide the VPP (Virtual Power Plant) logic to aggregate diverse Distributed Energy Resources (DERs)—such as batteries, solar inverters, and EV chargers—into a unified, dispatchable resource. The system creates a “Virtual Resource” that masks the complexity of individual devices, allowing you to bid a stable 1MW or 10MW block into the capacity market without exposing the volatility of the underlying assets.
We utilize a “Build vs. Buy” hybrid model. You receive a perpetual license with full codebase transfer, eliminating recurring per-asset fees. This allows you to own your trading and settlement platform—a critical IP asset for any aggregator—while deploying the platform’s backbone in just 4–8 weeks by leveraging our pre-built integration accelerators.
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