Utility Dive•10 days ago
ISO-NE proposes capacity market overhaul with shift to ‘prompt’ auction
Key Takeaway
ISO-NE's move to a prompt capacity market fundamentally reshapes investment signals and risk for generation developers and large consumers by prioritizing short-term accuracy over long-term planning certainty.
AI Summary
- •ISO-NE proposes a major overhaul of its capacity market, shifting from a three-year-ahead procurement to a one-month-ahead "prompt" auction.
- •This change aims to enhance the accuracy of load forecasts and grid metrics by significantly reducing the lead time for capacity commitments.
- •For developers, this implies increased uncertainty for long-lead-time projects and could favor existing, flexible generation assets capable of responding to short-term market signals.
- •Large power consumers might benefit from more accurate and potentially less volatile capacity costs, but also face increased exposure to short-term supply-demand dynamics and potential price spikes.
Topics
capacity-marketpolicy
Article Content
ISO New England aims to switch to buying capacity a month ahead of time instead of three years in advance. This framework would make its load forecasts and other key metrics more accurate, according to the grid operator.