PJM Capacity Price Forecast Update BRA 2026/27 | Utility Dive | Capacity News
The 2026/27 PJM RPM Base Residual Auction is scheduled for early December. Ethan Howland reports in today’s Utility Dive that according to Morgan Stanley and ESAI Power’s Scott Niemann, PJM capacity auction prices could plausibly clear at the price cap. Whilst clearing at the cap is a “very plausible” outcome, there are scenarios where pricing clears at “substantially” lower prices.
Capacity prices for the majority of the PJM Interconnection’s footprint could hit the $695/MW-day price cap, up 157% from the record-high of $270/MW-day reached in PJM’s July capacity auction and driven by tight power supplies, according to a report released Wednesday by Morgan Stanley.
The potential jump in capacity prices 2026/27 delivery year auction set for December would be a financial boost to power plant-owners, after PJM released the “planning parameters” for the upcoming auction on Monday, August 26th.
With the upcoming auction’s steep demand curve, a small change in supply can make a large difference in price, according to Scott Niemann, Managing Director and Principal at ESAI Power, a market research and consulting firm. It’s a “very plausible” outcome that the auction clears at the price cap, but there are scenarios where it clears at “substantially” lower prices, he said Thursday.
Scott Niemann, Managing Director & Principal at ESAI Power, said new capacity supply could come from demand response resources, reactivations of retired generating units and changes in resource accreditation. “Capacity comes out of the woodwork when prices are high,” he said. Even so, Niemann believes capacity prices in the next auction will likely be higher than in the last one unless more supply is able to enter the market than anticipated.
PJM operates the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia.
Read the full article in Utility Dive
