PJM task force will examine value of summer-only DR outside capacity market
New rules developed in the wake of the extreme winter Polar Vortex event three years ago have had an impact on demand response in the PJM footprint. Now, the grid operator is considering how better to include the highly-seasonal resource.
In a blog post, PJM said the scope of the problem statement had been “narrowed from considering all seasonal resources to focus on summer-only demand response, given that it was the seasonal resource with the largest amount of offered, but not cleared, megawatts in the 2020/2021 Base Residual Auction.”
Capacity prices across most of the PJM market fell for the 2020-2021 delivery year, coming in under expectations and clearing 165,109 MW of unforced capacity in total. Demand response capacity clearing PJM’s annual auction peaked in 2012, a year after the Federal Energy Regulatory Commission issued Order 745.
But after the polar vortex of 2014, when many resources were forced offline by extreme temperatures, the operator instituted new capacity requirements aiming to provide greater resiliency. But by requiring resources to be available year-round, PJM created a situation where demand response resources in the summer could not find enough winter resources to pair with, to create a year-round offer.