PJM BRA 2023/24 Rule Changes and Auction Parameters: Capacity Price Forecast | Capacity Watch Blog
Published November 23, 2021 | capacity-watch
For Investors, Developers and Generation Owners making investment decisions in the PJM RTO it’s imperative to be up to date on the market fundamentals, latest regulatory updates, and other rule changes that may impact pricing moving forward.
In ESAI’s latest Capacity Watch report, we analyze the three major rule changes that will impact pricing in the upcoming PJM Base Residual Auction (2023/24 BRA) and the subsequent influence on clearing prices out to 2030. Here are a few highlights from the report:
- ELCC – FERC’s approval of PJM’s revised proposal to implement capacity accreditation using an effective load carrying capability (ELCC) approach. The ELCC rules will result in changes, both higher and lower, in the qualified capacity of some intermittent resources in PJM. For example,
- ELCC rules are expected to facilitate additional participation by battery storage assets, that previously had an 8-hour requirement.
- Longer-term, the ELCC approach is expected to limit the growth in qualified capacity from some renewable technologies, particularly grid-level solar.
- MSOC – FERC approved a default Market Seller Offer Cap (MSOC) based on the Net Avoidable Cost Rates (Net ACR) for resources, which is more restrictive than both the MSOC that was in place for the 2022/23 BRA and the replacement approach proposed by PJM.
- MOPR – A deadlocked FERC failed to reach a majority decision about PJM’s proposed revisions to the Minimum Offer Price Rule (MOPR), resulting in the proposed changes taking effect by law. Under the new MOPR, offer floors will be imposed only for resources from suppliers deemed to have the ability and incentive to exercise buyer market power. Mitigation will not be triggered by subsidies used to advance state policy objectives or by new merchant entry. Although the rule change is expected to apply for the 2023/24 BRA in January 2022, the filing was met with significant pushback from stakeholders and rehearing requests pending.
The Capacity report also discusses how the 2023/24 BRA clearing prices will be affected by the updated PJM auction parameters, including:
- Net CONE values for the RTO and each LDA.
- Updated RTO-wide Reliability Requirement and VRR Demand Curve.
- CETL values for each LDA, including changes to MAAC, COMED, and ATSI.
ESAI’s updated forecast, reflecting the PJM BRA parameters and rule changes, is discussed in the latest issue of Capacity Watch published recently to our subscriber base. For more information about our Capacity Forecasts, see our Capacity Market Coverage.
Request Your Free Energy Research Reports
Please fill in your contact details, check the box(es) on the right to indicate your preferred complimentary research report, up to a maximum of 3 reports and if you have any comments.
*Project Evaluation Program (PEP) database with detailed evaluation of generator projects under development and at-risk of retirement not included in free trial for Capacity Watch. ESAI Power grants free trials at its sole discretion. Note: the PEP product can be viewed on a demo basis over zoom or teams. Corporate policy is not to grant access to our most recent reports during a free trial.
ESAI Power LLC
401 Edgewater Place, Suite 640
Wakefield, MA 01880
ESAI Power is a market research and consulting firm that delivers focused analysis of the wholesale power markets in the Northeast region of the US: PJM, NYISO, and ISO-NE. Since 2001, ESAI has been providing market-focused research product content and custom consulting services for Northeast power market participants including investors (banks, private equity, & hedge funds) & developers, generation owners & operators, utilities & retail electricity suppliers, regulators & RTOs, traders, and end-users & buyers.
Who We Serve
- All Content Offers
- Clean Energy Service Brochure
- Forecast Methodology Brochure
- Free Trial Report Request Form
- Investors & Developers Brochure
- Long-Term Forecasts Brochure
- Near Term Service Brochure
- Owners & Operators Brochure
- Power Purchasing Agreements WP
- Quarterly Power Service Brochure
- Subscribe To Our Newsletter
- Utilities & Electric Suppliers Brochure
- WholeView Service Brochure
- ISO-NE Forward Capacity Auction Forecast Track Record November 27, 2023
- PJM Capacity Auction Track Record 2016 – 2023 November 21, 2023
- ISO-NE Energy Watch Update | October 2023 | Energy Watch Blog October 11, 2023
- NYISO Capacity Prices Volatile Heading into Winter 2023-24 | Capacity Watch Blog October 9, 2023
- RGGI Auction 61 – Clearing Prices Up Nearly 9% | Emissions Watch Blog September 8, 2023
- Will Virginia leave RGGI? | Emissions News August 31, 2023
- PJM Interconnection Process Update | Generation Asset Monitor Blog July 24, 2023
- NYISO Capacity Price Forecast | Capacity Watch Blog July 3, 2023
- RGGI Auction 60 – Clearing Price of $12.73/ton | Emissions Watch Blog June 9, 2023
- MISO PRA Scheduled to start April 18th | Capacity Watch Blog March 28, 2023
- Platts Global Power Markets™ Conference April 17-19 March 28, 2023
- Power and Energy Markets Analyst March 17, 2023
- Senior Research Manager March 16, 2023
- RGGI Auction 59 – Clearing Price of $12.50/ton | Emissions Watch Blog March 10, 2023
- ISO-NE FCA17 Auction Dynamics and Capacity Price Forecast | Capacity Watch Blog February 24, 2023