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PJM©2013
PJM Capacity Market Overview Jeff Bastian Manager, Capacity Market Operations April 9, 2013
PJM©2013 2
PJM: Who We Are
KEY STATISTICS Member companies 800+
Millions of people served 60
Peak load in megawatts 163,848
MWs of generating capacity 185,600
Miles of transmission lines 59,750
GWh of annual energy 832,331
Generation sources 1,365
Square miles of territory 214,000
States served 13 + DC 21% of U.S. GDP produced in PJM
As of 7/2012
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Objectives of RPM
• Resource commitments to meet system peak loads three years in the future
• Three year forward pricing which is aligned with reliability requirements and which adequately values all capacity resources
• Provide transparent information to all participants far enough in advance for actionable response
Purpose of RPM is to enable PJM to obtain sufficient resources to reliably meet the needs of electric consumers within PJM.
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Foundation for RPM Structure
Resource Adequacy
Requirement
Locational Constraints
RPM Structure
• Auction Structure
• Market Power Mitigation
• Performance Requirements
• Self-Supply Alternative (FRR Option)
Forward Procurement
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Coal-fired Generation Retirements
Over 20,000 MW of Pending Deactivations (~17,500 MW since 11/2011)
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PJM Forward Capacity Market Performance, 2007 - 2015 Demand Resource Additions
Cumulative Generator Capacity Additions
M W
New Generators - 15,135 MW Generator Uprates – 6,079 MW
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Gas
Coal
Demand Response
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16Delivery Year
All Renewables Wind/ Solar
PJM Installed Capacity Cleared
Managing a Sea-Change
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PJM Power Price Components
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Forward Capacity Market Performance Assessment – Primary Findings
– RPM has achieved resource adequacy • RPM has attracted and retained sufficient capacity to meet or exceed reliability requirements
– Prices have been consistent with market conditions • Lower prices (below Net CONE) under excess supply conditions • Higher prices under tighter supply conditions, but still below Net CONE in recent auctions
– RPM has reduced costs by fostering competition • Generally level playing field has reduced costs by attracting investments in low-cost supplies
from demand response, efficiency and uprates
– RPM has enabled cost-effective response to environmental rules • Facilitated economically efficient tradeoffs among investment in environmental retrofits,
retirement and replacement with lower-cost alternative supplies
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