Well, they've finally done it. The cost of electric capacity is now the same in Washington, D.C. as it is in the poor, southern West Virginia coal fields. This is what PJM's markets have been shooting for -- to make everyone pay the same price for energy, no matter which community shoulders the biggest burden to produce it.
PJM looks at it as sufficient generating capacity being available where it's needed, whether through physical location or with the help of new high voltage transmission.
PJM shared the results of its annual base residual auction for 2017/18 on Friday. The annual auction secures needed capacity three years in the future and determines the price winning generators will receive just for existing. Bids are stacked by price until the capacity target is reached, and the highest bid in the stack is the common price all winning generators will be paid.
New this year is a common RTO-wide price, except for the PSEG zone in New Jersey, which is still "constrained" and must run higher priced generators to meet capacity. For many years, other east coast locations also separated at a higher price because they were "constrained" and "needed" to import "cheaper" generation from places like West Virginia.
The RTO-wide price for 2017/18 is $120 MW-day, and the PSEG price is $215 MW-day. The PSEG price really didn't change from the prior year, but the RTO-wide price doubled. So now most of the RTO can pay more.
I'm not going to hyperventilate over incumbent generator manipulation of the market with new regulation in order to raise prices. I think that part has been covered elsewhere, ad nauseam. Big deal.
Most of this report is about as exciting as watching paint dry. I did find it interesting that PJM applied a capacity factor of only 13% to land-based wind resources bid into the auction. That means wind is counted on to actually generate when called at a rate of 13% of its maximum available capacity. How many wind farms would be needed to produce a reliable, base load resource when they can only be counted on at 13% of their name plate capacity? Big wind is not the answer.
Solar fared much better, with a 38% capacity factor. *hint, hint*
Blah, blah, blah.
Oh, but wait.... The DC Appeals Court dropped a turd in PJM's punchbowl on Friday, vacating a FERC Order regulating demand response. Demand response was one of the capacity resources that cleared in PJM's auction.
PJM looks at it as sufficient generating capacity being available where it's needed, whether through physical location or with the help of new high voltage transmission.
PJM shared the results of its annual base residual auction for 2017/18 on Friday. The annual auction secures needed capacity three years in the future and determines the price winning generators will receive just for existing. Bids are stacked by price until the capacity target is reached, and the highest bid in the stack is the common price all winning generators will be paid.
New this year is a common RTO-wide price, except for the PSEG zone in New Jersey, which is still "constrained" and must run higher priced generators to meet capacity. For many years, other east coast locations also separated at a higher price because they were "constrained" and "needed" to import "cheaper" generation from places like West Virginia.
The RTO-wide price for 2017/18 is $120 MW-day, and the PSEG price is $215 MW-day. The PSEG price really didn't change from the prior year, but the RTO-wide price doubled. So now most of the RTO can pay more.
I'm not going to hyperventilate over incumbent generator manipulation of the market with new regulation in order to raise prices. I think that part has been covered elsewhere, ad nauseam. Big deal.
Most of this report is about as exciting as watching paint dry. I did find it interesting that PJM applied a capacity factor of only 13% to land-based wind resources bid into the auction. That means wind is counted on to actually generate when called at a rate of 13% of its maximum available capacity. How many wind farms would be needed to produce a reliable, base load resource when they can only be counted on at 13% of their name plate capacity? Big wind is not the answer.
Solar fared much better, with a 38% capacity factor. *hint, hint*
Blah, blah, blah.
Oh, but wait.... The DC Appeals Court dropped a turd in PJM's punchbowl on Friday, vacating a FERC Order regulating demand response. Demand response was one of the capacity resources that cleared in PJM's auction.
*PJM is evaluating a May 23 appeals court ruling vacating FERC Order 745 in its entirety. This ruling could affect how demand response resources are able to participate in PJM’s markets in the future. Since the court has not issued a mandate requiring FERC to take action pending appeal of its ruling, there are no immediate impacts on the current base residual auction results.
Well, ut-oh. Just one more day in the regulatory cesspool.
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