ESAI Power LLC Announces Publication of 4th quarter of 2018 Capacity Watch™
October 31, 2018
This issue of Capacity WatchTM provides our updated outlook for each of the northeast capacity markets. In New York, spot auction clearing prices are down for the 2018/19 Winter Capability Period due to new supply additions. For Summer 2019/20 and beyond, increases in the locational requirements and peak load forecast result in an increase in the forecast for the G-J Locality and New York City, while a lower expected peak load and a drop in the installed reserve margin dampen the outlook for Rest-of-State.
In PJM, updated parameters for the VRR curve are pending FERC approval, including a significant reduction in the CONE value and a rightward shift of the VRR curve. The updated parameters proposed by PJM will have a downward impact on the next Base Residual Auction (BRA). More significantly, the BRA outcome and long-term market outlook will be shaped by the outcome of the on-going FERC proceeding related to offer price mitigation reforms.
In New England, the ISO has made its informational filing regarding capacity qualified for FCA13, to be conducted in February 2019. The ISO has also released parameters for the zones and demand curve for the auction. Based on expected retirements and potential static delist bids, ESAI has increased its forecast for the FCA13 clearing prices to reflect a moderate reduction in the supply surplus heading into the auction. Please see the accompanying excerpt for review.