In our most recent PJM public webinar, they team shared their outlook for CIFP Capacity Market Reform in PJM. In the session, they took a deep dive into the following topics:
- The reform filing will reduce capacity accreditation for almost all asset classes, allow inclusion of capacity performance penalty risk costs in bids, and lower the capacity performance penalty cap, among other changes.
- A FERC decision on the filing is expected by the end of this year and a later response would further delay upcoming auctions.
- The reform could raise future BRA clearing prices by up to $75/MW-day compared to a “status quo” scenario, causing RTO prices to reach $200/MW-day by 2031, MAAC by 2028.
- Solar capacity revenues will roughly halve due to the reform, while those of wind could increase by up to 400% due to changes in ELCCs. Natural gas assets can expect a capacity revenue increase of 25-33%, with a large upside for coal and nuclear.
If you are interested in the full report or have any other questions, please reach out to Jay DeCunzo.