PJM BRA 2023/24 ESAI Capacity Price Forecast | Capacity Watch Blog
For Energy Investors & Developers and Generation Owners & Operators making investment and trading decisions in the PJM RTO, it’s imperative to have an in-depth market model with a deep analysis of the market fundamentals, the latest regulatory updates, and other rule changes that may impact pricing moving forward.
Surface level analysis is not enough when it comes to making investment decisions in the PJM Capacity Market. The PJM BRA for 2023/24 Delivery year is set to begin June 8, 2022.
ESAI Power’s recent Capacity Watch includes our forecast for the PJM BRA 2023/24. Our PJM analysis this quarter incorporates ESAI’s forecast for the PJM BRA 2023/24, and analyzes:
- Four Market Rule changes (and what they mean for auction clearing prices)
- Updated BRA parameters
- Expected Supply and Offers for the PJM base residual auction
- PJM BRA forecast for PJM RTO, MAAC, SWMAAC, BGE, EMAAC, PSEG, ATSI, COMED, and DEOK
Capacity Watch’s coverage of the PJM major rule changes and market parameters are highlighted below.
Here are the four market rule changes that will impact 2023/24 BRA clearing prices:
- Revised MOPR provides exemptions for merchant entry along with resources added in response to public policy initiatives and incentives.
- MSOC – PJM will apply a revised MSOC with a default cap for existing resources based on a Net Avoidable Cost Rate (ACR).
- ELCC – an Effective Load Carrying Capability capacity accreditation approach will be applied for intermittent and duration-limited resources.
- VRR Curves methodology – the method for adjustments to the VRR curves has been revised for 2023/24.
PJM posted updated planning parameters for the 2023/24 BRA on February 28th. Final parameters for the BRA were initially posted in November 2021, in advance of the scheduled auction opening in January, and have now been updated due to the delay in the auction schedule resulting from FERC’s order on December 22, 2021. Read our initial analysis of the November parameters for 2023/24 BRA.
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 Investors & Developers
ESAI Power provides investment, valuation, and risk assessment support for financial firms investing in the Northeast power markets. For 20 years, ESAI Power has provided investors with objective analysis based on sound fundamental modeling. With a deep understanding of market rules and regulatory issues that impact market outcomes in PJM, NYISO and ISO-NE, ESAI’s reports include price forecasts for capacity, energy & RECs. Our market reports and analyst insights into complex market dynamics help investors make difficult investment decisions in the ever-changing and evolving Northeast power markets.
Learn About Capacity Watch
Capacity WatchTM – Provides quarterly analysis of capacity markets and policy issues that impact capacity price outcomes over a 10-year forecast horizon. Also provided is an evaluation of the outlook for the construction of each generation project in PJM, New York, and New England. Every project is assigned a “probability of completion” factor in percentage terms which is then applied to develop a forward assessment of likely capacity additions within a particular pool. The impacts of new generation and retirements on reserve margin surpluses and forward capacity market values is updated and presented in each issue. ESAI’s project database (Project Evaluation ProgramTM) is updated and presented with each issue.
For Owners & Operators
ESAI Power provides market and regulatory support to generation and portfolio owners operating in the Northeast power markets. For 20 years, ESAI Power has delivered objective analysis based on sound fundamental modeling and a solid understanding of the market rules and regulatory issues that can affect market outcomes in PJM, NYISO and ISO-NE. ESAI Power’s market reports and analyst interactions provide in-depth insights into complex market dynamics that help owners make difficult decisions in the ever-changing and evolving Northeast power markets.