US power grid operator PJM Interconnection’s latest capacity auction for 2022/2023 saw 1,512MW of solar procured, up 942MW on its most recent auction in 2018.
The regional transmission organisation said the latest auction price for all resources was US$50 per MW-day, a steep decline on the US$140 per MW-day set in 2018.
The fall in prices this year was the result of a lower load forecast and reserve requirement decreasing the amount of capacity needed, a drop in the cost of building new generators and entering the market, and overall lower offer prices from resources participating in the auction, according to PJM.
A total of 1,728MW of wind cleared, an increase of 312MW on 2018, while nuclear generators and combined-cycle natural gas plants also saw significant increases. Coal units saw the largest decrease, clearing 8,175MW fewer than the previous auction.
“PJM’s capacity market continues to support a competitive, diverse and reliable resource mix through the ongoing energy transition,” said PJM CEO Manu Asthana.
This year’s auction procured a total 144,477MW of resources for the period of 1 June 2022 until 31 May 2023 at a total cost of US$3.9 billion.
The PJM capacity auction procures power supply resources in advance of the delivery year to meet electricity needs in its service area, which includes all or part of 13 states and the District of Columbia, ensuring reliability for more than 65 million people.
While the auctions are held three years in advance of the delivery year, the 2022/2023 auction was originally scheduled to be held in May 2019, but was postponed until this year as FERC considered the approval of new capacity market rules.
The next PJM capacity auction, for the 2023/2024 delivery year, will take place in December 2021.