By Michael Kuser
Prices in ISO-NE’s Forward Capacity Auction sank to a five-year low on a surplus of available resources, the RTO said Thursday.
The preliminary clearing price in Tuesday’s 12th FCA for the 2021/22 commitment period dropped 13% to $4.63/kW-month, its lowest level since 2013. Last year’s auction cleared at $5.30.
Nearly 34,830 MW were acquired in the auction — 1,105 MW more than the target — at a cost of about $2.07 billion, putting the value of the auction $330 million below last year and about half the level of FCA 9.
Resources totaling 40,612 MW qualified to participate in the auction, including 35,007 MW of existing capacity and 206 new resources totaling 5,605 MW.
FERC accepted ISO-NE’s informational filing for FCA 12 last month, rejecting protests from CPower and Tesla, which sought to compel the RTO to re-evaluate the renewable technology resource designation for six solar projects, and from Efficiency Maine Trust, which challenged the methodology for calculating existing capacity qualification values. (See FERC OKs ISO-NE FCA 12 Filing; Rejects Protests.)
Zone by Zone
Like last year, the most recent auction saw the region divided into three zones: Northern New England (NNE), comprising Vermont, New Hampshire, and Maine; Southeast New England (SENE), composed of Southeastern Massachusetts, Rhode Island, Northeastern Massachusetts and Greater Boston; and Rest of Pool (ROP), made up of Connecticut and western and central Massachusetts. System planners modeled NNE as export-constrained and SENE as import-constrained.
Some existing resources dropped out during Tuesday’s auction when prices fell below the level needed to justify carrying the risks of a capacity supply obligation, prompting the RTO to conduct reliability reviews on about 2,775 MW seeking to delist.
The reviews indicated “that transmission lines in a particular sub-region could be overloaded in extreme summer weather, jeopardizing reliability, if about 1,300 MW of submitted delist bids were not available,” Robert Ethier, ISO-NE vice president of market operations, said in a statement. “The ISO will address that potential reliability risk by retaining the resources for the 2021-2022 capacity commitment period. All other delist bids, including other bids in that sub-region, were accepted.”
FCA 12 closed for most resources after four rounds of competitive bidding. The $4.63/kW-month clearing price will be paid to all resources in all three capacity zones in New England, 524 MW of imports from New York and 57 MW from one interconnection with Quebec.
Imports over two other interconnections from neighboring regions, Quebec and New Brunswick, continued into a fifth round, which closed at $3.70/kW-month for 442 MW from Quebec and $3.16/kW-month for 194 MW from New Brunswick.
New and Old
No new large generators cleared in the auction, but included in the 174 MW of new generation that did clear is a new 58-MW natural gas unit and 87 MW of increased generating capacity at some existing power plants, the RTO said.
ISO-NE also noted that 3,600 MW of energy-efficiency and demand-reduction measures cleared the auction, including 514 MW of new resources —the equivalent of a large power plant. Also clearing were 1,217 MW in total imports from New York, Quebec and New Brunswick.
In total, 132 MW of wind and 86 MW of solar facilities cleared FCA 12, including 1 MW of new wind and 21 MW of new solar facilities. Most photovoltaic resources in the region are on the distribution system and don’t participate in the wholesale markets.
Retirement bids that were submitted and accepted before FCA 12 totaled 511 MW of resources, including one large generator — the 383-MW Bridgeport Harbor 3 coal-fired unit. The RTO will file final auction results, including resource-specific information, with FERC later this month.