PJM Says Reserves Pricing During Cold Snap Shows Need For Price "Reforms"
In a news release concerning recent winter operations, PJM said, "Pricing in PJM’s reserve market during stressed conditions showed that valuable energy reserves, while adequate during these periods, were not appropriately compensated in the market, which supports the movement for price reforms."
"As noted after the 2018 cold snap, and reinforced this year, the price of procuring reserves does not always reflect their value. Synchronized reserves can provide power to the grid within 10 minutes, or quickly remove electricity demand, and are crucial to reliability. On Jan. 31, however, Synchronized Reserve Market prices in PJM were at or near zero for 19 of 24 hours, suggesting that those reserves have little or no value. PJM plans to file a proposal with the Federal Energy Regulatory Commission in the near future to improve how reserve prices are formulated," PJM said
PJM also said that during the 2013-2014 winter, PJM faced forced generation outages of up to 22 percent. Last winter (2017–2018), the extended cold snap produced forced outages of just 12 percent. And during the recent cold weather of Jan. 30 and Jan. 31, PJM saw outages down to 8.6 percent and 10.6 percent, respectively.
Older generators still online but slated for retirement experienced outages of between 18 percent and 23 percent, more than those of other generators across the PJM footprint, which ranged from 7.0 percent to 10.6 percent.