FERC’s acceptance of 2 capacity accreditation methods will complicate renewables development
Utility Dive, June 6, 2022
In their op-ed published in Utility Dive, Vice Presidents Joseph Cavicchi and Charles Wu discuss potential implications of decisions by the Federal Energy Regulatory Commission (FERC) that approved different intermittent and energy-limited resource capacity accreditation methodologies for the New York Independent System Operator (NYISO) and the PJM Interconnection. Because intermittent resource capacity accreditation quantities can vary considerably depending upon the methodology used, the authors compare PJM’s average or portfolio accreditation methodology with NYISO’s marginal capacity accreditation methodology.
The authors explain that, while the adoption of different methodologies should not impact electric system reliability, the electric system resource mixture can be expected to be different under each methodology. They conclude by cautioning that, if market design principles and renewable resource policy objectives are in conflict, the role of capacity market prices in guiding investors’ long-term exit and entry decisions could be undermined.