PJM Interconnection Faces Reliability Concerns Amid Capacity Auction Shortfall

The U.S. Department of Energy and governors from states within PJM Interconnection's territory have recommended a 'Reliability Backstop Auction' following PJM's recent capacity auction, which did not meet reliability targets. FactSet posted on X, highlighting concerns about grid reliability and the need for incentives to encourage developers to build new dispatchable generation to balance the grid amid increasing load forecasts. PJM is considering a backstop auction as proposed by the DOE, but it may not resolve the core issue of PJM's lengthy and unpredictable interconnection queue. FactSet Energy's latest Energy Market Insight examines PJM's current challenges, including load forecasts, short-term capacity additions, and interconnection queue management.