A regional transmission organization ISO New England Inc. (ISO-NE) had ran a capacity auction to procure the resources that will be needed to meet New England’s projected demand in 2019-2020, and purchased 6.8MW of capacity from Deepwater Wind’s Block Island offshore wind farm, among others.
New England’s annual capacity auction concluded on 8 February with sufficient resources to meet the demand in three years in the future, at a lower price, and with more than 1,400MW of new generating capacity that will help replace recently retired and retiring generators. Recent and pending retirements of coal, oil, and nuclear power plants expected to shut down by 2019 total more than 4,200MW, including the 680MW Pilgrim Nuclear Power Station that announced its retirement before this auction, ISO-NE said.
About 35,567MW of capacity cleared the auction to meet the 34,151MW Installed Capacity Requirement (ICR) for 2019-2020.
“Developers were drawn to the New England marketplace because the price of capacity supports construction of new resources,” said Gordon van Welie , president and CEO of ISO New England. “This auction procured the resources needed to keep the lights on in New England at a price lower than last year’s auction and, in fact, lower than the estimated cost of building a new power plant. More than 850 megawatts of new generating capacity cleared in the Greater Boston, Southeast Massachusetts and Rhode Island zone where the resources are needed most.”
The auction closed for resources within New England after four rounds of competitive bidding at $7.03/kW-month. The clearing price was more than 25% lower than last year’s $9.55/kW-month for most resources, according to ISO-NE.
At $7.03/kW-month, the total value of the capacity market in 2019-2020 will be approximately $3 b illion, compared to the estimated $4 billion for 2018-2019.