Monitoring Analytics is PJM’s independent market monitor.
Bowring said that, with many people thinking about reworking markets, the market has worked, “however imperfectly.”
“Through ongoing changes since 1999, the markets have worked,” said Bowring. “Let’s not lose sight of that. Despite their imperfections, PJM’s markets have been robust through change.”
Bowring also reviewed the components of PJM’s locational market pricing.
He said that while low prices have made it hard for some resources to compete, it is not true for all resources, citing new entry into the market. Bowring said that history bore him out, noting that while more than 20,000 coal megawatts have left the market since 1999, more than 20,000 MW of other resources have come into the market.
While Bowring said he never makes predictions, everyone should realize that the grid of the future is likely to rely more on gas and renewables, if market fundamentals are allowed to play out. The challenge is not to pick what resources will succeed but to make sure market outcomes are respected.