Demand Resource Modeling in PJM Capacity Market

To ensure sufficient resources that are available to be called upon for the reliability of the electric grid, the Reliability Pricing Model (RPM) has been constructed to clear the PJM capacity market. It provides locational capacity pricing to recognize and quantify the locational value of resource capacity to meet the reliability requirements. Starting year 2011 for the 2014/2015 PJM Base Residual Auction (BRA), in addition to the existing Limited Demand Resource (DR) product which is only required to respond no more than 10 times each summer and no more than 6 hours per interruption, two new DR products with fewer limitations have been introduced: Annual(ANL) DR and Extended Summer (ES) DR. To ensure sufficient commitment of less-limited resources, and make use of limited DR resources, the RPM auction clearing needs to recognize and model the maximum allowed quantities of the more-limited DR products. The maximum allowed quantities of more-limited DR products are implemented in RPM auctions as minimum requirements for the less-limited ANL resources and ES resources, which are newly introduced in addition to the total overall resource requirements of the entire PJM RTO and smaller locational regions within the RTO. The DR integrated RPM engine has been used to clear PJM BRA since year 2011. The DR model for PJM capacity market is presented in this paper. Impacts of the capacity requirement enforcement on the market clearing solution and prices are analyzed in details.