In an industry filled with complex topics and terms, one of the most challenging to understand is uplift. PJM’s new Learning Center page helps explain uplift and out-of-market payments using an unexpected everyday analogy.
Understanding Uplift and Out-of-Market Payments explains how payments to generation or demand response resources in certain situations ensure that these resources are appropriately compensated when following PJM’s instructions to produce or reduce power.
Out-of-market payments are transactions that are exceptions to the usual PJM markets policies; these exceptions are made in order to ensure the reliable operation of the power grid.
To understand this concept, the page compares a generator (e.g., a power plant), who has been contracted to provide a specific amount of energy for a certain number of hours, to a babysitter who has been contracted to provide childcare services for a set number of hours each day.
The Learning Center at learn.pjm.com is a 101-level education resource dedicated to explaining, in simple terms, the energy industry and PJM’s role in keeping the power flowing.