The energy market is full of acronyms. Use this glossary to understand the key terms that impact your capacity costs and revenue potential.
A third-party entity authorized by PJM to manage demand response portfolios. CSPs act as the intermediary between the grid operator and the end-use customer, handling registration, settlement, and compliance. Traditional CSPs take a 30-50% cut of revenue, while modern "Technology-as-a-Service" CSPs charge a flat fee.
PJM's primary capacity auction, held three years in advance of the delivery year. The BRA secures enough power capacity to meet forecasted peak demand plus a reserve margin. The clearing price established in the BRA determines the base revenue rate for capacity resources, including demand response.
A PJM demand response program where participants are paid to reduce load during declared grid emergencies. It is a "Capacity Performance" resource, meaning participants facing strict penalties for non-performance, but earn higher revenue than economic-only programs.
A customer's contribution to the grid's peak demand, measured during the 5 highest coincidental peak hours (5CP) of the previous summer. Your PLC determines your capacity obligation (cost) for the following delivery year. Reducing load during these 5 peak hours lowers your capacity costs significantly.
The wholesale price of electricity at a specific location (node) on the grid at a specific time. It reflects the cost of energy, transmission congestion, and marginal losses. Economic demand response participants are paid the real-time LMP when they curtail load voluntarily.
PJM's capacity market structure ensuring long-term grid reliability by securing diverse power resources (generation, demand response, energy efficiency) three years in advance.
A strict performance product requiring resources to be available during emergency events throughout the year. Non-performance results in significant penalties. Most current PJM demand response capacity is procured as CP.
An ancillary service market for resources that can respond instantly (within 10 minutes) to correct grid frequency. Demand response assets with automated controls can participate in SRM for additional revenue on top of capacity payments.
Similar to PLC, but used to calculate transmission (NITS) charges. It is based on the single highest peak hour of the year in your utility zone.