FEATURE : US capacity markets face major changes in 2020, potentially lower prices

摘要

Mandatory power capacity markets in the US Northeast region are at an inflection point, with federal regulators about to issue an order regarding market rule changes for PJM Interconnection that could decrease prices. ISO New England also is set to run its second auction under new rules in February, and the New York Independent System Operator’s capacity market construct is in question heading into the new year. Capacity markets, which pay generators for maintaining available capacity that can be delivered at a future date, were designed when nuclear power, coal- and natural gas-fired generation resources played a larger role in regional power generation fuel mixes. However, states have begun supporting renewable energy resources through renewable portfolio standards and other mechanisms. The downward impact on power prices from renewables growth, the rapid growth of natural gas production and gas-fired generation, and flat to declining utility load growth also have forced states to start providing out-of-market subsidies to financially challenged baseload nuclear plants.