The capacity auction accepts energy efficiency bids from projects that use efficient devices, equipment, processes or systems that save energy beyond existing standards (such as building codes).
PJM also accepts demand response bids. But that resource saw a decline in winning contracts. PJM procured 10,975 MW, a 1,433 MW drop from last year. Of those demand response projects bidding, 97.2 percent cleared the auction.
PJM offered a silver lining for demand response. While the overall amount of demand response is down, the type offered will better serve the grid, according to PJM. Specifically, the auction brought less ‘summer-only’ demand response and more annual and ‘extended summer’ demand response.
This shift gives system operators the opportunity to rely on demand response more throughout the year. Demand response is typically needed on hot summer days. But the grid has seen new strain at other times of the year because of severe weather. For example, PJM had to call on demand response in September 2013 and January 2014.
The future of demand response in the auctions is somewhat murky because of a ruling last week by the U.S. Court of Appeals for the D.C. Circuit. The court vacated a federal order meant to guarantee that demand response has a place in wholesale markets. PJM said that the ruling has no immediate impact on the auction results.
Of course, power plants remain the largest capacity resource for PJM. In total, the auction closed with commitments from 167,004 MW of power, energy efficiency and demand response capacity. Not surprising, the region continued its shift toward gas-fired generation, with 4,800 MW of new combined-cycle generation clearing.
More details about the auction are here.
