Definition of Price Capture
The term "capture factor" is defined as the ratio of the effective electricity price achieved by the project owner to the baseload price. Due to the intermittent and weather-driven nature of their generation outputs, the high deployment of renewables such as solar, off-shore and on-shore wind leads to a negative impact on the wholesale market price during times of high renewable generation. This effect is known as "price cannibalization”.
Price cannibalization is more pronounced in markets with high renewable penetration, resulting in lower capture factors and thus the lower economic viability of renewable projects.