A recent capacity auction of the PJM Interconnection shows that renewable energy sources are growing swiftly. Renewable resources, including demand response and energy efficiency, made up nearly three-fourths of the new capacity available and about 7% of the resources clearing the auction.
PJM announced the results of its reliability pricing model (RPM) capacity auction for resources to meet customers’ electric power demand in the June 1, 2013, to May 31, 2014, delivery year.
"We’re seeing the success of RPM in attracting resources to the most transmission-constrained areas where they’re most needed," says Andrew Ott, PJM senior vice president of markets. "Over 63% of the cleared demand response was in the higher-price, transmission-limited regions. In addition, investment in new generation and upgrades to existing generation resources are occurring, showing that generation owners are investing capacity revenues to maintain and enhance existing units."
The RPM auction procured 152,743 megawatts (MW) of capacity resources, including 9,282 MW of demand response (a 32% increase compared to last year’s auction results), 679 MW of energy efficiency, 590 MW of wind power and 10.6 MW of solar power.
Because wind and solar are intermittent, only part of the output is counted on for reliable power supplies. The wind clearing the auction represents 4,535 MW of wind energy, and the solar power represents 27.9 MW of solar energy. More than 340 MW of new generation was located in transmission-constrained areas.
The demand response (DR) industry is expected to begin a period of dramatic growth in 2013, according to a recent Pike Research report, which forecasts market growth from $1.4 billion in 2010 to $8.2 billion in 2020.
The RPM price in half of PJM will be $27.73/MW day and will be between $226.15/MW day and $247.14/MW day in the remaining transmission-constrained areas. Transmission-line constraints led to higher prices in these eastern sub-regions.
PJM’s analysis shows that since the first auction in 2007, the RPM has retained and attracted 33,090 MW of power-capacity resources compared to what would have happened without the RPM.
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