PJM secures new resources to meet electric power demand

Sponsored by

The results of PJM Interconnection's recent auction to procure power supplies three years into the future continues an overall trend toward more gas-fired generation and increasing diversity of resources. They also show a shift in demand resources from limited summer availability to extended and annual availability, which improves the usefulness of demand response.

The clearing price for resources, which include generation, annual demand response and energy efficiency, is $120/megawatt-day for all of PJM except the PSE&G location deliverability area. The PSEG area is the only constrained area in this auction. The clearing price for resources in PSEG is $215/MW-day.

"Capacity prices in the western half of the market have increased to make prices more uniform across the system," said Andrew L. Ott, executive vice president – Markets. "Frankly, this is the kind of price that sends the right signals to generators. And, we've seen developers respond in this auction with new resources concentrated in the most capacity and transmission needy areas."

The Reliability Pricing Model auction produced an adequate amount of resources to serve the PJM region in the June 1, 2017 to May 31, 2018 delivery year. The total capacity procured in the auction was 167,004 MW, which represents a 19.7 reserve margin. One megawatt is enough to power about 1,000 homes.

PJM, which administers the wholesale power market, holds a three-year forward capacity auction each spring. The auction establishes contracts with suppliers who commit to make their facilities available to provide electricity for the PJM system for a year. Prices are established through competitive bidding.

The shift to increased amounts of new natural gas-fired generation continues with roughly 4,800 MW of new combined-cycle generation clearing for the first time in this auction. Almost all of this cleared new capacity is located downstream of west-to-east transmission constraints or in areas with capacity needs.

A total of 10,975 MW of demand response was procured — a decrease of about 1,433 MW from last year's auction. However, there was a significant shift to the types of demand resources that have more flexibility and a greater contribution to reliability. There were 1,401 MW more "annual" and 4,693 MW "extended summer" demand resources clearing in this auction than last year, while the amount of "summer-only" demand resources declined by 7,527MW since last year.

This shift gives system operators more year-round flexibility in drawing on demand response when needed. PJM experienced the need for flexible demand response during recent extreme weather, both in September 2013 and January 2014.

Energy efficiency continues its growth trend in PJM's capacity auctions. This year, a record 1,339 MW of energy efficiency was procured in the auction, an increase of 222 MW from last year's auction.

Sponsored by

CURRENT ARTICLES

Your consumers take on distributed generation

01/30/2015 Distributed generation, often also referred to as decentralized energy, is a complex and essential topic for today’s utili...

DistribuTECH 2015 expected to be largest in event history

01/30/2015

The world's largest electricity T&D show is on track to draw more than 10,000 attendees

DistribuTECH is the place for networking

01/30/2015

Here are a few items to help plan your time and make the most of your DistribuTECH 2015 experience

Siemens to provide long-term service at Blythe Energy Center in California

01/30/2015

The customer is AltaGas Ltd, headquartered in Alberta, Canada 

DOE announces five-year renewal of funding for first energy innovation hub

01/30/2015 This will help enable the role that nuclear energy has in providing dependable and affordable energy to America while adva...

Maine activists push solar power, energy efficiency bills

01/30/2015 The six-bill package outlined by the Environmental Priorities Coalition includes measures that would provide incentives fo...

NextEra Energy will not lay off Hawaiian Electric workers after merger

01/30/2015 An official at NextEra Energy told Hawaii lawmakers that his company does not plan to lay off staff if it acquires Hawaiia...

INDUSTRY STOCKS

ON DEMAND WEBCASTS

Engaging the Small and Mid-sized Business (SMB) Marketplace

This session will outline how Duke Energy leveraged Voice of Customer insights, previous experien...

When Grid Optimization is Not Enough: Making Cents of Disruptive Change.

Electric utilities today face unprecedented volatility and business challenges. To stay competiti...

Avoiding the Pitfalls of Premium Power

Premium power is an increasingly valuable tool for utilities and municipalities, who can charge m...

The Integrated Operating Model Creating an Advanced Outage Management Environment to Control the Grid

Amy Hime, Senior Manager of Engineering and Asset Systems at Enersource, will discuss the journey...

Benefits of a Managed Service System

Attend this webinar, sponsored by Itron, to understand how utilizing managed services can optimiz...

EL&P BUYER'S GUIDE PRODUCTS

MITEM Corp

Provides CRM solutions for regulated U.S. public utilities. The product, MitemView integrates differently designed systems to share critical data a...

Resources on Demand

Manages resource requests, tracks personnel movements, and supports lodging/logistics during a power restoration event.

Smart Grids

Quanta is contributing to its customers' smart grid initiatives by installing technology on power networks to provide energy management solutions f...

Horizontal Directional Drilling

With 28 small, mid-sized and large drilling rigs, Quanta Pipeline Services is one of the largest horizontal directional contractors in the world fo...

POWERGRID PRODUCT LISTINGS

EtherMate® Industrial Ethernet - IO Modules

LioN-M ProfiNet device with 16 digital I/O channels, channels can be used universally as inputs or outputs, M12 socket, ro...

Low-Smoke Zero Halogen Premise Distribution Cable

AFL’s Low-Smoke Zero Halogen (LSZH) distribution cable offers all of the benefits of a traditional 900 µm based optical ca...

OFL280 FlexTester - Handheld OTDR

AFL's OFL280 FlexTester offers an unmatched combination of fiber test functions, ease-of-use, portability, and value.

TRM® 2.0 - Test Results Manager PC Analysis and Reporting

Test Results Manager 2.0 (TRM® 2.0) is an all-in-one analysis, viewer and reporting tool designed for use with NOYES fiber...

FEATURED ENERGY JOBS

View more Job Listings >>

POWERGRID International

November 2014
Volume 19, Issue 11
1411pg-cover

ELECTRIC LIGHT & POWER

October 2014
Volume 92, Issue 5
1409ELP-cover_digital