Market Watcher Finds PJM Competitive Wholesale Electricity Market

Markets / May 12, 2022 / DRPhillF / 0

PJM 2022 Quarterly State of the Market Report: January to March

Eagleville, Pennsylvania.And 12 May 2022 /PRNewswire/ — PJM Interconnection’s wholesale electric power market achieved competitive results during the first three months of 2022, according to PJM 2022 Quarterly State of the Market Report: January to March Released today by Monitoring Analytics, LLC, PJM’s independent market monitor.

independent market observer, Joseph BoringToday’s report results. The report is an independent market observer’s assessment of the competitiveness of PJM-operated wholesale electricity markets in 13 states and District of Columbia. The report includes analysis of market structure, participant behavior, and market performance for each of the PJM markets.

“Our analysis concluded that PJM Energy Market results were competitive in the first three months of 2022,” Boring said.

Energy prices increased in the first three months of 2022 compared to the first three months of 2021. The real-time weighted average load in the first three months of 2022 increased by 75.5 percent over the first three months of 2021, from $30.84 USD per megawatt-hour to $54.13 per megawatt-hour, USD 23.29 per megawatt-hour. This was the highest price increase in the first quarter since the polar vortex in the first quarter of 2014. This was the third highest increase in the first quarter of a monthly cycle since the establishment of PJM Markets in 1999. The highest increase occurred in 2014 as a result of the polar vortex in the first quarter, The second highest level occurred in 2003 when winter load increased and natural gas prices doubled above 8.00 dollars per Dth in the first quarter. subordinate USD 23.29 For every megawatt-hour increase, 49.0 percent was a direct result of higher fuel costs and emissions, especially higher natural gas prices. Average real-time hourly load in the first three months of 2022 increased 2.4 percent over the first three months of 2021, from 89,887 MWh to 92,007 MWh.

The total wholesale energy price rose from $53.30 per megawatt-hour in the first three months of 2021 to USD 80.28 per megawatt-hour in the first three months of 2022, an increase of 50.6 percent. Power, capacity and transmission charges are the three largest components of the total price of bulk energy, making up 98.0 percent of the total price per megawatt-hour in the first three months of 2022. Beginning in the third quarter of 2019, transmission cost per megawatt-hour of bulk power was higher of capacity cost.

PJM’s energy prices in the first three months of 2022 were determined, on average, by units operating at or near their marginal short-term costs, although this was not always the case. This is evidence of competitive behavior in general and competitive market outcomes, although higher marks for some marginal units have affected prices.

In the first three months of 2022, generation from coal units decreased by 3.1 percent, and generation from natural gas units increased 6.9 percent compared to the first three months of 2021.

Net revenue is a key measure of overall market performance as well as a measure of the incentive to invest in generation to serve PJM Markets. Theoretical net revenue from the energy market for all unit types increased in the first three months of 2022 compared to the first three months of 2021. Theoretical net energy revenue increased by 145 percent for new combustion turbines, 94 percent for a new combined cycle, and 54 percent for a coal unit. new, and 75 percent for a new nuclear plant.

Total power-up fee decreased by $5.9 millionor 17.2 percent, in the first three months of 2022 compared to the first three months of 2021, from $34.3 million to $28.4 million.

When there are binding transmission restrictions and differences in on-site energy prices, customers pay more for energy than generation pays to produce that energy. The difference is the crowding. Congestion returns to the customers and must be returned to the customers. Overall congestion increased by $389.2 million or 321.5 percent, of $121.1 million In the first three months of 2021 to $510.3 million in the first three months of 2022. But only 31.9 percent of total customer traffic for the first 10 months of the 2021/2022 planning period was returned to customers through ARR and FTR self-scheduled revenue offsetting. The goal of designing the FTR market should be to ensure that customers receive 100 percent rights to customer-paid traffic.

An independent market observer (also known as a Market Monitoring Unit or MMU) evaluates the functioning of wholesale markets at the PJM to identify ineffective market rules and tariff provisions, suggests improvements to market rules and tariff provisions when needed, monitors compliance with the market and enforced rules, and identifies potential competition-granting behavior of accepted by market participants and provides a comprehensive market analysis that is important for policy and informed decision-making. Joseph BoringThe market observer ensures the independence and objectivity of the monitoring programme.

For a copy of the State of the Market Report, visit Monitoring Analytics at: http://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2022.shtml.