Here’s a concise, market-focused summary of the latest PJM capacity auction results for the 2027/2028 delivery year, with analysis on price, resource mix, reserve margin, and implications for gas and power prices:
PJM 2027/2028 Capacity Auction Results (Dec 2025)
Cleared Capacity:
134,479 MW (UCAP) cleared in the auction
Additional 11,299 MW (UCAP) in Fixed Resource Requirement (FRR) areas
Total: 145,777 MW (UCAP) available
Clearing Price:
$333.44/MW-day (UCAP) — at the FERC-approved cap
Up 1.3% from the prior auction ($329.17/MW-day for 2026/2027)
This is the second consecutive year clearing at the cap, reflecting persistent supply/demand tightness
Comparison to Previous Auctions:
Delivery Year | Clearing Price ($/MW-day UCAP) | Reserve Margin |
|---|---|---|
2025/2026 | $269.92 (RTO) | ~18.5% |
2026/2027 | $329.17 (cap) | 14.8% |
2027/2028 | $333.44 (cap) | 14.8% |
Reserve Margin:
Cleared capacity is short of PJM’s reliability requirement by 6,623 MW
Actual reserve margin: 14.8% (below the ~20% “1-in-10” reliability standard)
Several mitigating factors (potential lower peak demand, possible generator extensions, winter-only resources) may help, but system risk is elevated
Resource Mix (UCAP):
43% Natural Gas
21% Nuclear
20% Coal
5% Demand Response
4% Hydro
2% Wind
2% Oil
1% Solar
Key Drivers:
Rapid demand growth, especially from data centers (+5,100 MW YOY)
Slow pace of new generation additions (only 774 MW UCAP of new generation cleared)
Structural retirements of thermal units outpacing new supply
ELCC (Effective Load Carrying Capability) adjustments increased DR value, but overall resource adequacy remains tight
Market Impact & Outlook
Power Prices:
Bullish: Capacity costs are locked in at record highs, supporting forward power prices across PJM.
End users should expect capacity charges to remain a significant component of total electricity bills through at least 2028.
Natural Gas Demand:
Bullish for gas: Gas-fired generation remains the backbone of PJM’s capacity mix (43%).
With coal retirements and limited renewable additions, gas will continue to set marginal generation and capacity prices.
Reliability/Reserve Margin:
Bearish for reliability: The region is below its target reserve margin for the first time, increasing the risk of scarcity pricing and reliability events, especially during extreme weather or unexpected outages.
Table: PJM Capacity Auction Highlights
Metric | 2026/2027 | 2027/2028 | Change |
|---|---|---|---|
Cleared Capacity (MW UCAP) | 134,376 | 134,479 | +103 |
Clearing Price ($/MW-day) | $329.17 (cap) | $333.44 (cap) | +1.3% |
Reserve Margin | 14.8% | 14.8% | Flat, below req. |
Shortfall to Reliability Req. | +139 MW (surplus) | -6,623 MW (deficit) | -6,762 MW |
Analyst View: Bullish
Capacity prices remain at the cap, reflecting severe supply/demand tightness.
Gas and power prices are supported by the structural deficit and slow new build pace.
Reserve margin shortfall and ongoing demand growth (esp. data centers) will keep the market tight and volatile.
Expect continued policy and market reforms, but near-term risk is skewed to the upside for both capacity and energy prices.
For more detail, see the official PJM auction summary:
PJM Auction Procures 134,479 MW of Generation Resources
Bottom Line:
PJM’s 2027/2028 capacity auction underscores a structurally tight market, with bullish implications for both power and natural gas prices. The region is at risk of reliability events if new supply does not accelerate. Capacity costs will remain a major driver of end-user power bills.