On June 21, PJM Interconnection announced the successful procurement of resources in its annual capacity auction to meet electricity needs and ensure reliable service for the 2023/2024 Delivery Year.

The auction results reflect a reliable and lower-carbon resource mix achieved at a low cost to consumers.

Prices for the 2023/2024 Delivery Year were lower than in the previous auction for the 2022/2023 Delivery Year.

The auction produced a price of $34.13/MW-day for much of the PJM footprint, compared to $50/MW-day for the 2022/2023 auction in June 2021. Prices are higher in some regions due to constraints on the transmission system.

As a result, sufficient resources plus robust reserve levels were procured at a cost of $2.2 billion, compared with approximately $4 billion for the current 2022/2023 Delivery Year.

Carbon-Free Resources

PJM’s auction saw a growth of more than 5,000 cleared megawatts of carbon-free resources, led by an increase of 5,315 MW from existing nuclear units that did not clear in the previous auction.

Solar resources increased 25%, from 1,512 MW to 1,868 MW, while the number of wind resources clearing was down 434 MW to 1,294 MW. The decrease in wind resources clearing the auction reflected a decrease of wind resources offering into the auction.

Natural gas resources clearing the auction increased by 1,685 MW, with more efficient combined-cycle units clearing 3,627 more megawatts than the last auction and combustion-turbine units down 1,012 MW. Combined-cycle units cleared a total of 48,030 MW in the auction and combustion-turbine units 19,080 MW.

Cleared capacity of steam units (primarily coal) was down 7,186 MW to 27,682 MW, tracking with a decrease of 7,813 MW offered into the auction as a result of coal retirements.

A 660 MW increase in Energy Efficiency resources, to 5,471 MW, was offset by a 716 MW decrease in Demand Response to 8,096 MW.

Hydro decreased slightly, from 4,157 MW to 3,677 MW. The total procured capacity in the auction represents a 20.3% reserve margin, compared to a 14.8% required reserve for the 2023/2024 Delivery Year. This accounts for load and resource commitments under FRR.

In three areas, prices were higher than the overall PJM price--

-- In the MAAC region, the price was $49.49/MW-day. MAAC consists of Atlantic City Electric, BGE, Delmarva Power, Jersey Central Power & Light, Met-Ed, PECO, Penelec, Pepco, PPL, PSE&G, PPL and Rockland Electric.

Two transmission zones within MAAC broke out with higher prices than the rest of the MAAC area.

-- The auction price was $69.95 in both the Baltimore Gas & Electric (BGE) transmission zone and the Delmarva Power South (DPL-South) transmission zone, which is Delmarva Power south of the Chesapeake & Delaware Canal.

PJM has compressed its auction calendar to return to a three-year-forward basis. The next annual Base Residual Auction, for the 2024/2025 Delivery Year, will be held in December.

Click Here for a detailed report of the results on PJM’s capacity market auction.

Click Here for the complete announcement.

NewsClips:

-- Utility Dive: PJM Capacity Auction Prices Fall 32% With More Nuclear, Solar Capacity Clearing

-- Bloomberg: Payouts Fall On PJM Power Grid In Win For Nukes, Solar, Blow To Coal

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[Posted: June 21, 2022]

6/27/2022