Preliminary results indicate that the sixth Forward Capacity Market auction administered this week by ISO New England Inc. procured sufficient generation and demand-side resources to meet the region’s reliability needs in 2015–2016.
More than 38,700 megawatts (MW) of new and existing demand- and supply-side resources qualified to compete Monday and Tuesday to provide the 33,456 MW needed to meet demand for electricity in New England in the 2015 to 2016 timeframe. The descending clock auction started at a price of nearly $11.45 per kilowatt-month (kW-month). Bidding in the final, seventh round reached the floor price set for this auction at $3.43 per kW-month. Preliminary results show 30,757 MW of generating resources, 3,628 MW of demand resources, and 1,924 MW of imports cleared the auction, with approximately 2,853 MW of excess supply remaining.
In advance of and during New England’s Forward Capacity Auctions, existing power plants and demand resources may submit “delist” bids to withdraw from the capacity market. Those bids are evaluated to determine whether the resource is needed to ensure reliability on the power system. Finalized auction results, including information on any resources retained for reliability, will be included in a filing with the Federal Energy Regulatory Commission (FERC) within the month.
The Forward Capacity Market was developed by ISO New England, the six New England states, and industry stakeholders to promote investment in demand- and supply-side resources for the electricity industry. Under FCM, ISO New England estimates consumer demand and power system needs three years in advance and then holds an annual auction to purchase the power resources that will satisfy the future regional requirements.