Capacity Solicitation

The regional transmission organization (RTO) serving the Mid-Atlantic area, PJM Interconnection, announced that its most recent annual capacity auction attracted a record amount of competitive resources meeting strict performance standards.

The RTO observed that this was the first auction in which all resources had to meet capacity performance requirements, and the first to have participation by "Price Responsive Demand" resources, which it described as demand response-like resources that react to market signals.

PJM elaborated that all resources were required to meet capacity performance standards, under which they commit to perform when needed or face steep nonperformance penalties.

As an example of how such standards can be met, PJM pointed to generation owners that ensure firm fuel supplies or make improvements to their equipment. The RTO reported that the capacity solicitation attracted 2,350 megawatts (MW) of new natural gas-fired generation, plus more than 7,500 MW of demand-response resources that have committed to year-round availability. In addition, 119 MW of solar power, 504.3 MW of wind capacity, and 1,710 MW of energy-efficiency resources all cleared the auction.

The RTO stated that the auction produced a price of $76.53 per megawatt-day for resources in most of the PJM footprint.