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

Bonneville Power Administration gets back hiring authority

10/01/2014

Since then, the BPA has reconstructed 1,259 hiring cases involving over 22,000 job applications

EPA blames rise in 2013 carbon dioxide emissions on coal plants

10/01/2014 EPA has just released its fourth year of Greenhouse Gas Reporting Program data, detailing GHG trends and emissions broken ...

Albania borrows $150 million to improve power grid

10/01/2014 The World Bank is lending Albania $150 million to help overhaul its dysfunctional state-run power sector and pay for elect...

Siemens CEO named to European Wind Energy Association

10/01/2014 Tacke took the helm at Siemens Wind Power, a division that specializes in wind turbine manufacturing, on August 1, 2013

GE’s Distributed Power to supply gas engine technology in Thailand

10/01/2014

The LM6000-PD gas turbines will be used for combined cycle in the 224 MW power plant

University of Wyoming gets $4.25 million for wind energy research

10/01/2014 UW will use the money to conduct wind farm modeling, transmission grid monitoring and research the economics derived from ...

FERC approves Consumers Energy purchase of gas-fired plant

10/01/2014 The Federal Energy Regulatory Commission on Sept. 30 approved a Consumers Energy purchase of a gas-fired power plant in Mi...

ON DEMAND WEBCASTS

3D BIM for Substations—Driving Efficiency from Design Through Operation and Maintenance

In this webinar, PESTECH will describe their transition to intelligent substation design and its ...

High Availability Networks. Application of IEC6439-3 Protocols for IEC61850 Process Bus implementation

Networks can now be built for the first time with genuinely uninterrupted data communication betw...

Understanding Moisture Dynamics in Power Transformers

While the need to measure moisture in power transformers has been well documented and is universa...

Regional Market Outlook for the WECC and ERCOT

Looking for an independent market outlook and analysis of the WECC and ERCOT power markets? ...

Streamline Utility Field Inspections to Improve System Reliability &  Customer Satisfaction

Arm your workers with solutions that improve productivity and customer satisfaction. Listen in an...

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...

FEATURED ENERGY JOBS

View more Job Listings >>

POWERGRID International

May 2014
Volume 19, Issue 5
1405pg-cover

ELECTRIC LIGHT & POWER

March 2014
Volume 92, Issue 2
cover