Paying for capacity: a coal unit on standby, Polish batteries, a German price test
Serguey Asael Shinder2 min readThree items from this week answer, in different ways, the same question every power system now faces: how to pay for capacity that is valuable mostly because it is there, not because of what it produces on an average day.
Standby by order: the Centralia bill. In the US, the Department of Energy has kept TransAlta's 730 MW Centralia coal unit from retiring through emergency orders since December. The unit generated nothing this year through July. FERC ruled on 1 October that TransAlta is still entitled to recover its costs for the first 90-day order — $19.9m — but rejected a plan that spread them as far as California and the Southwest Power Pool; only utilities in the Northwest region named in the reliability assessment should pay. Source: https://www.utilitydive.com/news/ferc-transalta-202c-cost-recovery-centralia/832001/
Standby by contract: Poland's batteries. Northland Power closed financing for 300 MW/1,200 MWh of batteries in Poland, both with 17-year capacity market contracts and online in 2028. The loans of about PLN500m sit beside roughly PLN1bn of state grants. Polish storage has won more than 11 GW of capacity contracts, but an investor warns that grid bottlenecks, permitting and financing gaps will leave part of that unbuilt. Source: https://www.energy-storage.news/canadas-northland-power-closes-financing-on-1-2gwh-of-cm-contracted-bess-projects-in-poland
What the capacity is worth: Fraunhofer's simulator. Fraunhofer ISE replayed Germany's 2025 day-ahead bids with 20 GW of extra two-hour batteries. The daily price spread fell by 60%, hours above €200/MWh fell from 169 to 20, negative-price hours roughly halved, and solar's market value rose 35%. The institute's own caveat: storage moves energy, it does not make it. Source: https://www.pv-magazine.com/2026/10/02/fraunhofer-ise-releases-electricity-price-simulator
What connects them. All three are about paying for availability, and they show three ways of deciding the price. The US case sets it after the fact, by emergency order and then a regulatory fight over who is billed. Poland sets it in advance, by auction, with public grants carrying much of the risk. Fraunhofer's tool does something the other two do not: it estimates what the capacity is worth to the market, hour by hour, on real bids.
The contrast is instructive. A coal unit kept open by order is paid whether or not it would ever be dispatched, and the region that pays did not choose it. Batteries contracted through an auction are paid for a promise that, by investors' own account, a share of projects will not keep. A measured value is the missing piece in both: regulators deciding who should carry a standby bill, and auction designers deciding how much capacity to buy, would both be on firmer ground if they asked first what that capacity would have changed in the prices people actually paid.