Solar, efficiency play a role in crashing capacity prices in PJM Interconnection

For several years now European wholesale power prices have been crashing into the negative, as baseload generation is unable to keep pace with changed conditions caused by higher penetrations of wind and solar PV. Such phenomenon are also coming to the United States, with falling wholesale power prices in markets such as California. However, on Tuesday the results of an auction at the nation's largest grid operator showed that solar PV may also be impacting future capacity prices. PJM Interconnection's auction for capacity - firm power to meet reliability needs - for the 2019-2020 year resulted in prices of US$100 per megawatt-day for the majority of its 13-state area in the U.S. East Coast and Midwest. This represents a 40% fall from the previous year. Prices in the ComEd region in Northern Illinois were double this, but these also fell.? PJM notes a number of factors for the decline in prices, including both 5 GW of new combined-cycle gas generation, and a lower load forecast than the 2018-2019 year. The grid operator reports that 1.5 GW of energy efficiency cleared in the auction, along with 335 MW of solar ...

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