ISO-NE files finalized capacity auction results

ISO New England today filed the finalized results of the 18th Forward Capacity Auction (FCA 18) with the Federal Energy Regulatory Commission (FERC). The finalized results confirm that the annual auction, held February 5, secured commitments for 31,556 megawatts (MW) of capacity to be available in 2027/2028.

The results include a detailed breakdown of about 950 individual resource obligations, ranging in size from 7 kilowatts to 1.2 gigawatts and encompassing a wide variety of fuels and technologies.

Clean energy increases share

Non-carbon-emitting resources—including electricity generators, energy storage, and demand resources—accounted for about 40% of the capacity procured in the auction. The more than 12,200 MW of capacity in this category is a 10% increase from FCA 13, held in 2019.

More than 8% of the total obligations secured in FCA 18, or 2,614 MW, 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.

The auction procured more than 1,800 MW of energy storage, which was about 6% of the total. That number includes more than 700 MW of new energy storage resources. Five years ago, only 5 MW of energy storage cleared the auction.

Solar and wind resources accounted for about 4% of the auction’s total cleared capacity, up from 3% last year. At more than 1,250 MW, the amount of solar and wind that cleared in FCA 18 was three times the amount procured in FCA 13.

Prices confirmed

The finalized results confirm a clearing price of $3.58 per kilowatt-month (kW-month) in all zones and import interfaces.

Last year’s clearing prices ranged from $2.55 to $2.59 per kW-month across different pricing locations.

Forward Capacity Market auction basics

The annual auction of the Forward Capacity Market is held three years before each capacity commitment period. Capacity resources can include traditional power plants, renewable generation, imports, and demand resources such as load management and energy efficiency measures. The auction is technology-neutral, allowing different resource types to compete on price.

Resources that clear in the auction receive a monthly capacity payment in that future year in exchange for their commitment to provide power or curtail demand when called upon by the ISO. Resources that fail to meet their capacity commitment during a capacity scarcity condition must refund part of their capacity payment. This refunded money goes to resources that over-perform during the scarcity event.

The capacity market is separate from the energy markets, where resources with and without capacity commitments compete each day to provide power and are paid for the electricity they produce.