Finalized capacity auction results underscore region’s clean energy transition

ISO New England today filed the finalized results of the 17th Forward Capacity Auction (FCA 17) with the Federal Energy Regulatory Commission (FERC). The finalized results confirm that the annual auction, held March 6, secured commitments for 31,370 megawatts (MW) of capacity to be available in 2026/2027.

The results include a detailed breakdown of the more than 1,200 individual resource obligations, ranging in size from a single kilowatt to 1.2 gigawatts and encompassing a wide variety of fuels and technologies.

Future grid transition on display

Continuing a trend seen in recent auctions, new generating resources securing capacity supply obligations were non-carbon-emitting resources, including this year offshore wind, solar, and hydroelectric resources. Overall, non-carbon-emitting generators within New England, including new and existing resources, secured nearly a quarter of the auction’s total obligations. The 7,620 MW of obligations secured by these resources represents an 11% increase over the 6,844 MW of obligations secured by non-carbon-emitting resources in the 12th Forward Capacity Auction (FCA 12), held in 2018.

Solar and wind generation accounted for 3.5% of all obligations in FCA 17 (including new and existing resources), a sixfold increase over five years ago, and they accounted for 35% of new generating resources. Battery storage, which was largely nonexistent five years ago, also accounted for 3.5% of total obligations secured in FCA 17, and 65% of new generating resources.

More than 9% of the total obligations secured in FCA 17 went to new and existing demand-reducing resources. This category includes an assortment of business models, including traditional energy efficiency and demand response programs, as well as aggregations of residential homes that agree to reduce grid demand during peak summer hours through a combination of solar panels and batteries.

Low prices confirmed

The finalized results confirm a clearing price of $2.590 per kilowatt-month (kW-month) in all zones and import interfaces except the New Brunswick interface, which cleared at $2.551 per kW-month. These prices rank among the lowest in auction history.

Last year’s clearing prices ranged from $2.531 per kW-month to $2.639 per kW-month across different pricing zones; the auction’s lowest clearing price, $2.001 per kW-month, was recorded in 2020.

Forward Capacity Market auction basics

The annual auction of the Forward Capacity Market is held three years before each capacity commitment period, to provide time for new resources to be developed. Capacity resources can include traditional power plants, renewable generation, imports, and demand-side resources such as load management and energy efficiency measures.

Resources clearing in the auction will receive a monthly payment during the delivery year in exchange for their commitment to provide power or lower system demand. The capacity market is separate from the energy market, where resources compete on a daily basis to produce electricity or reduce use in real time. The results of FCA 17 show the capacity market not only attracting new clean energy resources, but securing existing capacity needed to meet the region’s reliability needs—including those resources needed to balance a grid increasingly powered by variable resources.

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capacity, energy storage, FCA 17, FERC, forward capacity market, future grid, offshore wind, renewable resources, solar, wholesale markets, wind