The price to guarantee that power plants will be available when they’re needed most has come down from last year, according to grid operator ISO-New England.
ISO-NE’s 10th annual forward-capacity auction (FCA) wrapped up last week, securing more than 34,000 megawatts worth of commitments for 2019-2020. Preliminary results reported by ISO-NE pegged the total cost of the commitments at approximately $3 billion, down from $4 billion in last year’s auction for 2018-2019.
Generators that cleared FCA 10 will receive monthly payments during the delivery year in exchange for their promise to provide power to the grid when called upon.
More than 1,400 megawatts of new power plants cleared the auction.
ISO-NE CEO Gordon van Welie said in a statement that power developers are attracted to the forward capacity market because it places “an appropriate value” on constructing new plants to meet future demand.
“The high participation in the auction demonstrates the interest in the New England marketplace and bodes well for meeting future resource adequacy requirements,” van Welie said.
New generation is also spurred by announced retirements of plants. Among those expected to shut down by 2019 is the 680-megawatt Pilgrim Nuclear Power Station in Massachusetts.
Connecticut’s sole remaining coal-fired plant, Bridgeport Harbor Generating Station, cleared 485 megawatts in FCA 10. Its owner said last week that it will convert the plant to run on natural gas.
