Policy & Regulation

Calpine to explore adding new generation in PJM after latest auction provides “loud and clear” message

The company is focusing on potential new generation in Ohio and Pennsylvania, but said clarity regarding state-level air emissions regulations is needed for projects to move forward in Pennsylvania.
Calpine to explore adding new generation in PJM after latest auction provides “loud and clear” message
(Bosque Energy Center, a Calpine-owned combined-cycle plant located in Central Texas. Source: Calpine.)

In response to skyrocketing energy prices within PJM Interconnection, power producer Calpine plans to explore multiple new locations for generation capacity, particularly in Ohio and Pennsylvania. The company also said it would explore a potential expansion of its existing fleet.

“When more electricity generation capacity is needed and reserves begin to tighten, a well-designed competitive market sends the appropriate signals to generators to spend capital on both new and existing sources. We received that message loud and clear,” said Caleb Stephenson, Calpine EVP of Commercial Operations.

Over the last decade, Calpine has brought online 1,600 MW of new gas-fired generation within PJM territory. PJM is the largest grid operator in the U.S.

Last month, PJM announced the results of its latest power market auction. The auction produced a price of $269.92/MW-day for most of the PJM footprint, compared to $28.92/MW-day for the 2024/2025 auction. The more than 800% increase expects to have a massive ripple effect across PJM’s 13-state footprint.

Insufficient future transmission planning, the retirement of fossil-fired generation, long interconnection queues and the implementation of FERC market reforms are all contributing to the price hikes.

While Stephenson said the auction results send a build signal to Calpine and other power producers, he said “clarity regarding state-level air emissions regulations is needed for projects to move forward in Pennsylvania.”

After seeing positive market signals in Texas, Calpine began redevelopment efforts in the Lonestar State last year. The company is reportedly on track to add over 1,000 MW of generation to its Texas fleet over the next few years.

“We are increasing staffing and are looking forward to bringing more generation online in PJM as well,” added Stephenson.

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