Overview of PJM energy market design, operation and experience

Abstract

This panel paper outlines the PJM energy market design, operation and experience. The PJM energy market consists of two markets, a day-ahead market and a real-time balancing market. The LMP is used to calculate charges or credits for delivering PJM market services including the spot market energy, the transmission congestion, etc. The fundamental features of the PJM energy market are described. The design of fundamental features ensure that the market is robust and competitive, the market mechanisms promote liquidity in the markets and the market economic incentives drive the convergence of the day-ahead and real-time market prices. The LMP-based markets support reliable grid operations through efficient price signals.