Dive Brief:
- The New England grid operator on Wednesday filed the results of its most recent forward capacity auction, FCA 18, with the Federal Energy Regulatory Commission, noting that it secured 31.56 GW of capacity and has sufficient resources for the 2027-2028 delivery period.
- More than 12 GW of clean energy capacity, including generation, storage and demand resources, accounted for 40% of the total capacity commitments and represented a 10% increase from FCA 13 in 2019, ISO New England said.
- Capacity prices were significantly higher than last year’s auction returned. The final results reflect a clearing price of $3.58 per kW-month across all zones and import interfaces, about a 38% increase over last year’s results.
Dive Insight:
The higher capacity prices resulting from FCA 18 reflect the bids and offers submitted by market participants and are “not part of any large trend or change observed by the ISO,” a spokesperson told Utility Dive in an email.
FCA 13 capacity prices closed at $3.80/kW-month and since then they have ranged from $2/kW-month to $3.98/kW-month, depending on the year and zone.
FCA 18 illustrates the changing energy mix in New England. More than 8% of the total obligations secured went to new and existing demand-reducing resources, the grid operator said.
“This category includes an assortment of business models, including traditional energy efficiency and demand response programs, as well as aggregations of residential homes that agree to reduce grid demand during peak summer hours through a combination of solar panels and batteries,” the ISO said in a blog post.
The auction also procured more than 1,800 MW of energy storage, or about 6% of the total capacity commitments. Only 5 MW of energy storage cleared in 2019.
Solar and wind accounted for about 4% of the auction’s total cleared capacity, up from 3% last year, the ISO said.
More than 900 resources cleared the auction, but no coal plant did. The region’s first utility-scale offshore wind facility, Vineyard Wind 1, did secure capacity payments, Sierra Club noted.
The auction results “point to a clean energy future for all of New England,” Andrea Callan, Sierra Club’s Northeast deputy regional field director, said in a statement.
New England’s next capacity auction is currently scheduled for 2026, but the grid operator wants FERC to approve a new approach beginning with the 2028-2029 capacity commitment period. The ISO wants to shift from its annual auction process, procuring energy resource commitments three years in advance, to a “prompt/seasonal” model that it says would better reflect changing demand and available resources.
Benefits of a seasonal market include more accurate accounting for seasonal differences in resources’ supply capabilities and forecast energy demand, the ISO said in a presentation to the NEPOOL markets committee outlining the proposed change.
