Second Transitional Auction Reaches Capacity Performance Target for 2017-2018
PJM’s second transitional auction achieved its targeted procurement of resources to meet strict Capacity Performance standards for the 2017-2018 delivery year. It followed a successful transition auction for 2016-2017.
PJM procured 112,195 megawatts of power resources under the new Capacity Performance initiative, 70 percent of capacity needs for 2017-2018.
The clearing price was $151.50 per megawatt-day, well below the offer cap.
“Once again, customers will receive the reliability benefits of Capacity Performance, which ensures that resources must be available to perform without excuses when we need them most,” said Stu Bresler, senior vice president – Markets.
“The successful results demonstrate that resources owners are preparing and making improvements to meet their commitments to the higher standards of availability and performance,” Bresler said. “Overall, the results met our expectations, and prices cleared significantly under the $210.83 offer cap.”
Capacity Performance requires that resources – generation, demand response and energy efficiency – produce electricity when called upon regardless of extreme weather or system conditions. Committed Capacity Performance resources that do not perform when called on will face significant non-performance charges.
The transition auction procured 700 MW of demand response and 932 MW of energy efficiency. Similar amounts of both resource types cleared in the previously held transition auction for 2016-2017.
The transition auctions for the 2016/2017 and 2017/2018 delivery years are part of the transition to a single capacity product. The transition over five years provides sufficient time for resources to invest in improvements in such areas as adding dual-fuel capability, securing firmer gas supplies and upgrading plant equipment.
The auction results are summarized in the following table:
|Fuel Type||Offered Capacity