Definition
Capacity factor is the ratio of a power source's actual energy output over a period to the output it would have produced running flat-out at full nameplate capacity for that entire period. Expressed as a percentage, it answers a simple question: how fully is this generator actually used? A 100 MW plant that produces 50 MW on average over a year has a capacity factor of 50%. It is one of the most important numbers in energy, and increasingly in Bitcoin mining, because it separates a generator's rated size from the energy it really delivers.
Why it varies so widely
Different energy sources have characteristic ranges. Nuclear plants run near 90%+ because they operate continuously as baseload. Combined-cycle gas sits in the middle. Wind (~25–45%) and solar (~15–25%) are far lower, because the wind doesn't always blow and the sun sets every night, their fuel is intermittent by nature. A low capacity factor doesn't mean a plant is broken; it reflects downtime for maintenance, fuel constraints, or, for renewables, the variability of the resource.
The miner's angle
Capacity factor is central to the economics of pairing mining with energy assets. A wind or solar farm with a 30% capacity factor wastes the other 70% of its potential, output that is curtailed or sold at a loss when the grid doesn't need it. A Bitcoin miner acts as a flexible, interruptible buyer of that otherwise-stranded energy, effectively raising the project's economic capacity factor by monetizing power that would otherwise go unused.
This dynamic underpins much of the case for mining on curtailed and behind-the-meter generation. See also baseload.
In Simple Terms
Capacity factor is the ratio of a power source’s actual energy output over a period to the output it would have produced running flat-out at…