The PJM Interconnection, the electric grid that serves 65 million from the mid-Atlantic to Illinois, just released the results of of its most recent annual competitive capacity auction. The amount of annual capacity of solar power that was approved in the auction increased 570 to megawatts approved, compared to 125 MWs in 2017.
The most recent auction will allow the grid operator or regional transmission organization (RTO) to provide reliable electric prices for its customers for three years from now, from June 1, 2021, to May 31, 2022. The organization uses the projected energy use of the region to procure wholesale power at competitive prices throughout the region for its customers, looking years ahead.
For the latest auction it procured 163,627 megawatts of electricity. More of that came from renewables and energy efficiency than ever before. PJM approved 1,417 MWs of wind power 529 MWs more than last year. Another 2,832 MW of energy efficiency also won in the auctions an increase of about 1,100 MWs over the past year.
“We’re pleased with the amount of renewable resources that were able to bid into our competitive auction,” said Stu Bresler, PJM senior vice president of Operations and Markets. “That diversity will serve our regional well, giving PJM the resources with which to maintain reliability of the grid.”
However the wholesale prices came in a lot higher than last year, at $140 per megawatt-day for most of PJM’s coverage area compared to $76.53 per MW-day last year. The organization attributed the change in price to transmission limits. A realization both anticipated and echoed by analysts.
Such changes in price however, could see more people looking to solar to power their homes and businesses. Since the cost of rooftop solar power isn’t impacted by PJM’s auction prices.
It also noted other factors increasing costs. Among them that low energy prices are causing energy generators “to seek revenues in the capacity market through higher offers.” The PJM also saw reduction in offers from new energy resources and some other factors.
Other energy resources, including natural gas and coal also won more of the auction. However, nuclear saw a drop of 7,400 megawatts approved for the period, clearing only 19,900 MWs of nuclear generation.
“PJM’s markets continue to retain a diverse set of resources and promote competition to support reliability of the grid,” said Andy Ott, PJM president and CEO. “The high-performing resources participating in our markets ensure that customers have reliable electricity at the lowest reasonable cost.”Tweet