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Fix the energy market
Draft

PJM-style Locational Marginal Pricing

A centrally optimised nodal market in which wholesale prices reflect marginal energy cost, transmission congestion and losses, supplemented by capacity and ancillary-service markets.

Solution section

Scarcity & Reliability

How scarcity, reliability and constrained access are managed.

Scarcity & Reliability

Operational scarcity is represented through market prices and security-constrained dispatch.

PJM also procures ancillary services and operates a separate capacity market.

Reliability is therefore produced through a combination of:

  • energy dispatch;
  • reserves;
  • ancillary services;
  • transmission-security constraints;
  • capacity procurement.

Historical exposure to poor service is not carried forward as an explicit fairness state in standard LMP clearing.