Integration of Demand Resource into PJM capacity market incremental auction

With the Reliability Pricing Model (RPM), PJM capacity market provides locational capacity pricing to recognize and quantify the locational value of resource capacity to meet the reliability requirements. In September 2012 for the 2014/2015 PJM first Incremental Auction (IA), in addition to the existing Limited Demand Resource (DR) product, two new DR products with fewer limitations need to be modeled: Annual (ANL) DR and Extended Summer (ES) DR. Meanwhile, the buy bids also have options to pay by the demand quality. The RPM IA clearing needs to recognize and model the offers and bids with various quality types, and ensure the clearing results to comply with the market rules. The DR integrated RPM engine has been used to clear PJM IA in September 2012. The integration of DR model into RPM IA model is presented in this paper. Impacts of the capacity requirement enforcement on the market clearing solution and prices are analyzed in details.