Utility Dive•about 1 month ago
PJM floats options for capacity market overhaul
Key Takeaway
PJM's urgent capacity market overhaul, including a potential shift to an energy market model, will fundamentally reshape revenue streams for generators and impact long-term power costs and reliability for large consumers.
AI Summary
- •PJM is proposing three options for a significant overhaul of its capacity market, citing the current system as "not tenable" and requiring decisions within "years, not decades."
- •One key option involves a fundamental shift towards an "energy market model," which would drastically alter how generation capacity is valued and compensated.
- •This overhaul signals imminent policy and regulatory changes that will directly impact investment decisions, revenue certainty for power generators (IPPs), and long-term power costs/reliability for large consumers.
Topics
capacity-marketfercpjmpolicy
Article Content
“The current situation is not tenable,” PJM President and CEO David Mills said. “The region has years, not decades, to make these choices deliberately.” The grid operator lays out three options, including shifting to an energy market model, in a white paper.