Solar quadruples in big US capacity auction as electricity price soars


The announcement yesterday of the results of the annual auction to secure energy for around a fifth of the U.S. population offer an interesting snapshot into the state of the nation's energy mix.

The amount of solar power commissioned by utility PJM Interconnection for the period from June 2021 to May 2022 rose fourfold to 570 MW, but that figure is only marginally higher than the rise – 500 MW – seen in coal-fired power as the Republican Party continues its attempt to roll back the all-of-the-above energy strategy of Donald Trump's predecessor as president Barack Obama, an approach GOP Party members label the War on Coal.

Perhaps the most startling insight offered by this year's capacity auction results – which will secure energy for 65 million PJM customers across 13 north-eastern U.S. states and the District of Columbia – was the huge leap in unit costs, as last year's $76.53/MW-day price rocketed to $140/MW-day, and as high as $204.29 for customers of the New Jersey based Public Service Electric & Gas Co.

In a press release announcing the results of the auction, PJM cited a fall in the amount of new capacity secured – thanks to lower forecast demand – and, curiously, the desire of generators to hedge against falling energy prices as reasons behind the hike facing consumers.

Another explanation stated by the utility for rising energy prices was the presence of fewer generators in this year's auction, perhaps as a result of the abandonment of Obama's intent to draw upon an array of power sources and almost certainly due to the ambivalent messages coming out of the White House regarding renewable energy and climate change.

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Interestingly, the rise in solar generation in the PJM auction was dwarfed by the advance of demand response bids and energy efficiency-related bidders. Demand response rose 3,305 MW on last year's secured capacity to account for 11,126 MW in 2021-22 and energy efficiency measures rose 1,100 MW to 3,832 MW.

Wind generation rose 529 MW to 1,417 MW and gas-fired power rose 1,000 MW as nuclear fell a thumping 7,400 MW, but still accounts for 19,900 MW of power generation for consumers across an area from Illinois, Kentucky and Tennessee in the west to North Carolina in the south and New Jersey, Pennsylvania, Ohio and Michigan in the north.


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