PJM and the capacity crunch

The PJM capacity auction this month broke records with sky-high wholesale power prices — and that was by design. Under PJM’s auction rules, tight supply raises prices, incentivizing the development of new generation and encouraging existing generation to stay online. The big driver of that tight supply? Data-center driven load growth. The independent system operator covers Virginia, one of the densest and fastest-growing regions for data center development.

So will higher wholesale prices incentivize enough generation to meet load growth without provoking the public with higher bills? 

In this episode, Shayle talks to Steve Piper, research director of North American power and renewables at S&P Global. Steve and Shayle cover topics like:

• Why Steve says PJM and other stakeholders became concerned that low prices weren’t incentivizing enough generation to stay on the market
• Why ISOs upping resource adequacy requirements across technologies, while raising targets for reserve margins
• The bottlenecks slowing down the development of new generation
• What’s holding back demand response in the auction

Resources:

• Latitude Media: Will Pennsylvania be the nation’s AI-energy model?  
• PJM: PJM Auction Procures 134,311 MW of Generation Resources; Supply Responds to Price Signal 
• Utility Dive: PJM capacity prices set another record with 22% jump 

Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor.

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