All articles tagged with #capacity auction
The mid-Atlantic region's power grid faces increased risk of blackouts due to a shortfall in electricity supply, driven by rising demand from data centers, with record-high capacity auction prices and a potential for higher costs and reliability concerns starting in 2027. Efforts are underway to extend price caps and improve supply, but challenges remain in meeting future demand.
PJM's 2027/2028 capacity auction secured 134,479 MW of generation and demand response, with a price at the cap of $333.44/MW-day, but still short of the reliability requirement by 6,623 MW, highlighting ongoing challenges in meeting system demand, especially with increasing data center loads. The auction results reflect market rule changes and efforts to address supply-demand imbalances through faster interconnection processes and new generation projects.
PJM's latest capacity auction set a record with prices reaching a $329.17/MW-day cap, up 22% from last year, driven by tight supply and demand conditions, and potentially leading to 1.5% to 5% rate increases for some consumers. Despite new generation and uprates, supply is not keeping pace with rising demand, prompting market consolidation and political debates over energy policies.