The PJM capacity auction, called the Base Residual Auction, procures power supply resources in advance of the delivery year to meet electricity needs in the PJM service area. That area includes all or part of 13 states and the District of Columbia. Capacity markets are designed to promote the development of new resources in advance of actually needing them because it takes several years to develop power plants.

Auctions are usually held three years in advance of the delivery year and the 2023/2024 auction was originally scheduled to be held in May 2020. It was suspended while the Federal Energy Regulatory Commission considered new capacity market rules.

This year’s auction procured a total of 144,871 MW for the period of June 1, 2023, through May 31, 2024. The total Fixed Resource Requirement (FRR) obligation was an additional 31,346 MW.

PJM cited a number of factors as contributing to the clearing price results, including:

• The first application of the less restrictive Minimum Offer Price Rule, applied to only seven resources representing 76 MW
• A revised, lower unit-specific Market Seller Offer Cap
• Less lead time to the delivery year (one year instead of three)
• The use of a historical rather than a forward-looking Energy and Ancillary Services Revenue Offset
• The first application of the Effective Load Carrying Capability (ELCC) method for determining the capacity value of wind, solar and storage resources

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

Solar resources rose 25%, from 1,512 MW to 1,868 MW. Meanwhile, the amount of wind resources that cleared was down 434 MW to 1,294 MW. The decline reflected a decrease of wind resources offered into the auction, PJM said.

Natural gas resources clearing the auction rose by 1,685 MW. More efficient combined-cycle units cleared 3,627 more megawatts than the last auction. Combustion-turbine units were 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 unit 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 power resources fell 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.

In three areas, prices were higher than the overall PJM price (see image). 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.

Texas-based Vistra said that it cleared a total of 6,868 MW in the PJM auction at a weighted average clearing price of $37.20 per megawatt-day. It said that equated to around $94 million in capacity revenue for the 2023/2024 planning year.

A detailed report of the results is available on PJM’s capacity market web page.