CASPR in New England – Market Minute (Video)
In New England, the second annual Competitive Auction for Sponsored Policy Resources (CASPR) took place in February 2020 for the power delivery year of 2023-24.
CASPR was created to prevent subsidized resources covered by tax credits or state incentives from depressing prices in New England’s forward capacity auctions.
CASPR was designed to allow retiring resources that had secured capacity supply obligations to transfer those obligations to new, subsidized resources that do NOT have an obligation.
The existing resource — from a retiring fossil fuel plant, for example — can then retire and receive a final payment equal to the difference between the (higher) forward capacity auction clearing price and the (lower) secondary auction clearing price.
According to ISO-NE’s published results of the February CASPR auction, zero MWs cleared the auction because there were NO retiring resources leaving the market.
This is the second year in a row the number of renewable resources seeking to ENTER the market have outnumbered the retiring resources seeking to exit the market.
ISO-New England, the region’s grid operator hasn’t committed to fundamentally changing CASPR in 2021, though there has been talk of altering auction as New England seeks to move away from a fuel mix dominated by fossil sources to one that features a greater mix of renewable sources.
For the latest insights on US energy markets by CPower, check back with “The Current” and stay ahead of energy’s demand curve.