Power Units: MW, MWh, GW and TWhkW
A megawatt (MW) measures power — the rate of producing or using energy — and a megawatt-hour (MWh) measures energy: 1 MW for one hour. 1 gigawatt (GW) is 1,000 MW, and 1 terawatt-hour (TWh) is 1,000,000 MWh. Wholesale power is usually priced per MWh.
Headlines mix up megawatts and megawatt-hours all the time. One is a rate, the other an amount, and confusing them makes every power price and capacity figure wrong.
- Category
- Commodities, Energy and Carbon
- Reading time
- 4 min
- Also called
- Electricity units, Megawatt vs megawatt-hour, Energy units
- Updated
Power vs energy in plain words
Watts measure power at a given moment; watt-hours measure how much energy is used over time.1
The prefixes scale by 1,000: one kilowatt is 1,000 watts and one MW is 1,000 kW.1
One kilowatt-hour is, for example, a 1,000-watt appliance running for an hour.2
How to convert power into energy
Identify the unit
Power is in watts, kilowatts, megawatts or gigawatts.2
Know the capacity
Capacity is the maximum power a plant can supply at a point in time.3
Multiply by hours
Energy = power × time; 100 MW for 24 hours gives 2,400 MWh.4
Scale up
1 GW is 1,000 MW, and 1 GWh is 1,000 MWh.3
Convert to TWh
1 TWh = 1,000 GWh = 1,000,000 MWh.
Apply the price
Wholesale prices are per MWh, so multiply energy by price.
Worked examples
Example 1 — A solar farm's day
300 MWh worth $12,000A hypothetical 50 MW solar farm produces at full output for 6 hours.
| Energy | 50 MW × 6 h = 300 MWh |
| Value at $40/MWh | 300 × $40 = $12,000 |
Energy is power times hours, exactly as in EIA's 100 MW × 24 h example.4
Example 2 — The unit mix-up
48 GWh, not 2 GWA note says a 2 GW plant 'made 2 GW' in a day of full output.
| Correct energy | 2 GW × 24 h = 48 GWh |
| In MWh | 48 × 1,000 = 48,000 MWh |
GW is a rate; the day's output is in GWh, where 1 GWh = 1,000 MWh.3
Example 3 — Annual TWh
8.76 TWh a yearA hypothetical 1 GW plant runs at full output all year (8,760 hours).
| Energy | 1 GW × 8,760 h = 8,760 GWh |
| In TWh | 8,760 ÷ 1,000 = 8.76 TWh |
Scaling by 1,000 at each prefix keeps the arithmetic simple.1
Power (MW) vs energy (MWh)
| Aspect | MW (power) | MWh (energy) |
|---|---|---|
| Measures | Rate at a moment | Amount over time |
| Used for | Plant capacity | Output, consumption, billing |
| Analogy | Speed | Distance |
| Priced in | Capacity payments ($/MW) | Wholesale energy ($/MWh) |
Where these units matter
Reading power prices
Wholesale Spot Trading quotes are per MWh.
Sizing positions
Contract Lot Size is often a set number of MWh.
Capacity news
Plant announcements use MW or GW.
Demand data
Annual consumption is in TWh, an Economic Indicator input.
Advantages and disadvantages
Advantages
- Simple 1,000× scaling between prefixes.
- Separates capacity from output clearly.
- Makes price × volume calculations easy.
Disadvantages
- MW and MWh are easily confused.
- Capacity overstates real output when plants don't run flat out.
- Different markets quote different units.
- Large numbers invite zero-counting errors.
Going deeper
Read as far as you need. Each level builds on the one before it.
Rate vs amount
Beginner
Watts measure a moment; watt-hours measure use over time.1
Capacity vs generation
Intermediate
Capacity is the maximum a plant can supply; generation is what it actually produces over hours.4
Trading volumes
Advanced
A 1 MW baseload block for a 30-day month is 1 × 24 × 30 = 720 MWh; multiply by $/MWh for notional. The prefixes scale by 1,000 throughout.1
Common mistakes
Saying MW for output
Output over time is MWh.
Dropping a factor of 1,000
GWh vs MWh errors.
Assuming full output
Using capacity as if the plant runs nonstop.
Mixing kWh and MWh prices
Retail is per kWh, wholesale per MWh.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- MW is power; MWh is energy.
- Energy = power × hours.
- Each prefix is 1,000×.
- Capacity is a maximum, not actual output.
- Wholesale power is priced per MWh.
Frequently asked questions
Is a MW bigger than a MWh?
How many homes does 1 MW power?
Why are retail bills in kWh?
Further learning
- Spot Trading
Where MWh prices are quoted.
- Lot Size
Contract sizes in MWh.
- Position Sizing
Turning MWh into risk.
- Futures Contract
Power forward contracts.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- U.S. Energy Information Administration. Measuring electricity (opens in a new tab) Checked .
- Energy Saving Trust. Energy jargon buster (opens in a new tab) Checked .
- U.S. Energy Information Administration. Electricity generation, capacity, and sales in the United States (opens in a new tab) Checked .
- U.S. Energy Information Administration. FAQ: What is the difference between electricity generation capacity and electricity generation? (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.