Magicka is your potential spellcasting ability. This is represented by the blue status bar, and measured in spell points. Every spell has an associated magicka cost, and your current spell point total must exceed that cost in order to cast it. Once cast, your magicka is drained by this amount. Aside from the inability to cast spells, there is no penalty if your magicka falls to zero.
Magicka and Spell Points
Your maximum spell point total is determined by your Intelligence attribute. The standard formula for determining this total for most character classes is
0.5 x Intelligence. Thus, a maximum Intelligence score of 100 will only grant 50 spell points. The only way to exceed this limit is to choose (or create) a class with an Increased Magery special advantage. These change the spell point formula multiplier to anywhere from 1x to 3x Intelligence. This is essential, if not required, for spellcasting characters to be successful.
The magicka cost of a spell will fall as you become more proficient in its associated skill, to a minimum of 5 spell points.