Post: PJM capacity auction procures sufficient resources

PJM capacity auction procures sufficient resources

Overall PJM’s latest capacity auction has successfully secured resources to meet the RTO reliability requirement for the 2025-26 Delivery Year. But two zones cleared just short of their reserve requirement, resulting in prices being set at the zonal cap.

Auction prices were significantly higher across the RTO due to decreased electricity supply caused primarily by a large number of generator retirements, combined with increased electricity demand and implementation of FERC-approved market reforms, including improved reliability risk modeling for extreme weather and accreditation that more accurately values each resource’s contribution to reliability.

The auction produced a price of $269.92/MW-day for much of the PJM footprint, compared to $28.92/MW-day for the 2024-25 auction. This year’s auction procured 135,684MW for the period of June 1, 2025, through May 31, 2026. The total Fixed Resource Requirement (FRR) obligation is an additional 10,886MW for a total of 146,570MW. The total procured capacity in the auction and resource commitments under FRR represents an 18.5% reserve margin, compared to a 20.4% reserve margin for the 2024/2025 Delivery Year.

Source: PJM

The auction cleared a diverse mix of resources, including 48% of gas, 21% of nuclear, 18% of coal, 1% of solar, 1% of wind, 4% of hydro, 5% of demand response and 2% from other resources.

The amount of supply resources in the auction decreased again this year, continuing the trend from recent auctions and underlining PJM’s stated concerns about generation resources facing pressure to retire without replacement capacity being built quickly enough to replace them. Approximately 6,600MW of generation have retired or have must-offer exceptions (signaling intent to retire) compared with the generators that offered in the 2024-25 Base Residual Auction (BRA).

The next BRA, for the 2026/2027 Delivery Year, is currently scheduled for December 2024.

Meanwhile, the peak load forecast for the 2025-26 Delivery Year has increased from 150,640MW for the 2024-25 BRA to 153,883MW for the 2025-26 Delivery Year.

GridBeyond sales director Alden Phinney said:

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