ISO-NE’s 15th annual Forward Capacity Auction (FCA 15) cleared with prices ranging from $2.48/kW-month to $3.98/kW-month — the high in Southeast New England (SENE) nearly doubling last year’s record-low figure, the RTO announced Thursday.
Outside of SENE, prices cleared at $2.48/kW-month in Northern New England (NNE) and Maine and $2.61/kW-month in the rest of pool (ROP), with a total cost of approximately $1.36 billion. In FCA 14, prices for all the RTO cleared at only $2.01/kW-month.
“The clearing prices in FCA 15 reveal the different values across the region based on the individual capacity needs for each zone,” said Robert Ethier, ISO-NE vice president for system planning. “In addition, new this year is a large amount of energy storage — almost 600 MW — that has cleared the market.”
Before FCA 15 took place, 199 MW of resources submitted retirement bids. An additional 43 MW of resources submitted permanent de-list bids to leave the capacity market; de-list bids of 101 MW cleared prior to the auction and 141 MW additionally during it.
ISO-NE said the FCA 15 results will be submitted to FERC by the end of the month.
The auction, conducted in up to five rounds of bidding Monday for capacity commitment period 2024/25, cleared 34,621 MW, a 1,351-MW surplus over the net installed capacity requirement of 33,270 MW. These comprised 29,243 MW of generation, with 950 MW of new resources and 630 MW battery storage resources; 3,891 MW of demand resources (170 MW new); and 1,487 MW of imports from New York, Québec and New Brunswick.
ISO-NE did not break down the storage figure, only saying that it included both new and existing resources, but it did report that more than 2,525 MW of new resources cleared. Approximately 19 MW of new renewables cleared under the renewable technology resource exemption in its final year. The exemption allowed a certain amount of new renewable capacity to clear without being subject to the minimum offer price rule, with nearly 600 MW clearing since FCA 9.
FCA 15’s capacity zones were identical to those for FCA 14: NNE, which includes Vermont, portions of Maine and New Hampshire; the rest of Maine; SENE, comprising eastern Massachusetts and Rhode Island; and ROP, composed of Connecticut and western and central Massachusetts.
Reaction
Dan Dolan, president of the New England Power Generators Association, said FCA 15 represents “a diverse set of technologies to meet capacity requirements in the years 2024 and 2025.”
“This capacity auction delivered strategic investments at power plants to increase capabilities and provide robust, cost-effective reliability services for consumers,” Dolan said. “Those investments will help facilitate and enable a transforming electricity grid to meet the demands of electrification and integrate large-scale renewables.”
He added, however, that “the electricity market must evolve.”
“State decarbonization policies are not today adequately accounted for, and it is past time that a solution is put in place,” Dolan said. “Whether through meaningfully pricing carbon dioxide emissions, or other proposals, market solutions exist.”
Theodore Paradise, senior vice president of transmission strategy and counsel at Anbaric, said the price separation in FCA 15 shows how important it is to look at total consumer benefits when considering competitive transmission, “rather than just upfront capital costs.”
“The capacity market is long, and what raised prices in this auction were transmission transfer limitations,” Paradise said. “Anbaric took those transmission system limitations into account when it designed the Mystic Reliability Wind Link. It was clear there would be transfer limitations into the Boston area that would very likely raise prices with the loss of 1,400 MW and in the absence of energy supply being injected via new transfer capability.”
Brandon Keefe, general manager at Plus Power, said his company was “excited to open New England to large, standalone energy storage” after it won two bids for battery plants in Massachusetts and Maine that “will help decarbonize the grid while improving regional reliability.”
“If Congress were to pass a federal investment tax credit for standalone storage, it could level the playing field and bring these kinds of projects, investment and jobs benefits across the country,” Keefe said.