PJM capacity auction for 2019-2020 prices plunge; two U.S. nuclear plants likely to shut as a result

PJM manages an electric grid in the NE, mid-Atlantic and midwestern USA, delivering power to over 60 million people.  Power is purchased based upon auctions of various types, and the system includes payments for capacity -- providers are paid in exchange for having available capacity to supply power as and when needed.  These capacity payments are significant -- perhaps 20% of total compensation -- and they reduce the risk for a generator who might be shut out of the market, say, upon a spike in the price for a particular type of fuel.  The auction last year, for capacity commitments over June 2018-May 2019 cleared with payments of $11 billion.

This year, the auction whose results were announced in late May 2016, for commitments from June 2019 to May 2020, cleared with payments of only $6.9 billion, down 39%.

Why were capacity payments lower?  For a start, the forecast demand was lower -- due to efficiency and demand response initiatives.  And there is a lot of new combined cycle gas generation which cleared the auction -- a result of the glut of natural gas now in North America.  All in all, over 10GW of "demand resources" cleared the auction, as well as 1.5GW of "energy efficiency", 5GW of added natural gas combined cycle, 969MW of wind generation capacity, and double the amount of solar in the previous year, at 335MW, according to PJM.

Two major Exelon nuclear plants failed to clear the auction, and will probably be shut down as a result.  An operator of ageing coal plants refused comment on whether its plants had cleared the auction. Wow.

It seems like only last year that Japan's 2030 "energy mix" forecast was suggesting a major role for coal and nuclear generation.  (Okay, it WAS only last year -- June 2015 -- when Japan rolled out that "energy mix" forecast!)  Meanwhile, in the smooth functioning, market-based system run by PJM, coal and nuclear are being squeezed dramatically.

Canadian Broadcasting Corp reports - Canada's "energy superpower" status threatened by renewables

The CBC on May 30 reports a draft study from Policy Horizons (Canada), a government think tank, from March 2016 that notes the energy transition from fossil fuels to renewables is going to happen faster than expected, and suggests that the "leave it in the ground" movement is, well, very realistic.

Among other big concepts in the report draft -- many components of the renewable energy ecosystem are declining in cost faster than predicted due to technological advances, accelerated economies of scale and the "learning curve".  Renewables are becoming cheaper than fossil fuels.  Inclusion of externalities in the cost of fossil fuels will only increase this differential.  Electricity storage solutions are becoming available and commercially viable faster than expected. Transportation may electrify faster than expected.  And yes, renewables enhance "national energy security, productivity and economic stability."  The report suggests caution about public-supported investment in fossil fuel-related infrastructure, since such investments could quickly prove stranded, and in such case the taxpayers should not be left to pay the bill.

Portugal Runs for 4 days straight on 100% renewable energy

This report from the Guardian online.

"As recently as 2013, renewables provided only about 23% of Portugal's electricity.  By 2015 that figure had risen to 48%."  Hydro, wind and solar.  In February 2016 they were at 95% renewables.

And no, they did not build a lot of big new hydro dams in 2014 and 2015, nor did they cut their electricity usage in half!

And even if most of the increase in renewables is wind and solar, they did add 260MW to an existing hydro/pumped storage plant in January 2013 -- and storage allows them to use renewables to get to such a high percentage.