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Capacity Market Reform in PJM: CIFP Scenarios

By August 17, 2023September 26th, 2023Public, Showcase Feed, Insight, North America, PJM

Key takeaways include the following:

  • There is still significant uncertainty around what reforms will be put forward and what their parameters will be, as well as whether they will be accepted by FERC.​
  • The Stage 3 proposal’s primary economic impact is to lower derating factors, thus driving up bids, increasing nameplate capacity procured, and raising clearing prices.​
  • The result is a positive financial impact for thermal assets—up to $+10/MW-day (avg.) for coal generators—and low to negative impact for renewables—$-2/MW-day (avg.) for solar PV, $+4/MW-day (avg.) for onshore wind.​
  • Newbuild thermal (or batteries) will likely become attractive quite quickly due to reduced derating factors. But the market’s ability to actually mobilize this is uncertain, given PJM’s slow interconnection queue and investor appetite.​

Complete the form to access the redacted report. If you are interested in the full report, please get in touch with Jay DeCunzo.

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