U.S power company Exelon said on Thursday that three of its nuclear plants did not clear in the annual capacity auction of grid operator PJM and that across all of PJM, 10,643 megawatts of nuclear capacity did not clear in the auction—the largest volume of nuclear capacity ever not selected in the auction.
PJM, which operates the grid in all or part of 13 states from New Jersey to Illinois and the District of Columbia, holds annually capacity auctions to ensure enough resources for power generation. The latest auction was for the period June 1, 2021 to May 31, 2022.
Exelon’s Three Mile Island (TMI) and Dresden nuclear plants did not clear in the PJM capacity auction, and all but a small portion of its Byron nuclear plant also failed to clear, the company said today.
“TMI, Dresden and Byron are economically challenged because the way energy prices are set in PJM does not compensate them for their unique contribution to grid resiliency and their ability to produce large amounts of energy without harmful carbon and air pollution,” Exelon said, adding that it is working on solutions that could prevent the planned premature retirement of TMI in October 2019.
The PJM auction produced a price of $140/megawatt-day for most of the PJM footprint, compared to $76.53/MW-day at last year’s auction, PJM said in the auction results announcement. The higher prices were due to several factors, including continuing low energy prices, which causes generators to seek revenues in the capacity market through higher offers.
“We are seeing an ever-increasing diversity of resources,” Stu Bresler, senior vice president, Operations and Markets, said, commenting on the auction results. “If you look at renewables, there was a significant increase in wind and solar. I was a little surprised by the amount of willing to commit as annual resources,” Bresler added.
This year’s auction cleared 500 MW more coal generation than last year’s auction; 1,000 MW more gas-fired generation than last year; and 19,900 MW of nuclear generation—about 7,400 MW less than last year’s auction.
The reduction in nuclear generation clearing the auction was not a surprise, and the drop was even less than some analysts had expected, Bresler said.