ISO-NE & PJM Summer Scarcity Prep: What Asset Owners Need to Know

As the summer months approach, ISOs and RTOs across the U.S. prepare for peak demand. Nowhere is the summer season more critical to asset owners than in the ISO-NE and PJM markets, where peak demand is driven by cooling loads and extreme heat events, and where the downside risk of capacity commitments can manifest. These peaks, typically occurring between June and September, test grid reliability and also serve as the defining period for capacity market participants.

For generating assets, like storage and solar, summer represents both a risk and an opportunity. For those assets participating in capacity markets, commitments must be honored, and operational readiness has direct financial implications. SYSO helps asset owners across PJM and ISO-NE prepare for summer scarcity events with strategic planning, operational support, and real-time dispatch management. In this article, we will review the challenges faced by storage and solar asset owners in PJM and ISO-NE during the summer season and how SYSO helps to navigate these complexities.

Unlike winter reliability concerns in PJM and ISO-NE that center around fuel availability, cold weather outages, and freeze-related transmission stress, summer scarcity stems from a different set of system pressures. Heat waves drive up air conditioning loads, sometimes creating emergency events in these regions. At the same time, summer is also the season when solar renewable energy assets perform at their peak due to longer days and increased irradiance. 

This intersection of high solar generation potential and peak demand volatility requires careful planning and coordination. Generating assets must be online, ready, and capable of responding quickly to market signals. Capacity revenues for the year can hinge on performance during just a handful of peak hours, and poor summer performance not only risks revenue loss but also exposes assets to penalties.

Capacity Markets Define Summer Expectations

Both ISO-NE and PJM administer forward capacity markets, the Forward Capacity Market (“FCM”) and the Reliability Pricing Model (“RPM”), respectively, that determine base compensation levels for resources participating in these markets as well as setting the administrative rates for bonus payments for overperformance and penalties for underperformance during grid scarcity conditions. When the system calls for additional capacity through scarcity events, resources with FCM and RPM commitments are expected to respond.

The structure of these markets evaluates actual performance against system needs, typically with little to no lead time, making responsiveness a critical component of capacity market performance. For solar and storage assets, this means system uptime, responsiveness, and dispatch coordination must be executed with precision.

Summer in PJM and ISO-NE presents an array of challenges for renewable and storage asset owners.

• Solar Assets: Solar generation typically aligns well with mid-afternoon peak demand; however, cloud cover, inverter constraints, and system underperformance can reduce real-time output when it is needed most. Solar owners must be able to ensure reliable generation during these hours to maximize the value of the asset and avoid costly capacity performance penalties.
  

• BESS Assets: Passive management of battery storage operations can result in lost revenue and risk of penalties for underperformance. It is imperative to monitor system uptime and ensure energy capacity is available and proactively dispatched during grid scarcity conditions when there are performance obligations for resources in the capacity market. This is most critical in the summer when peak loads associated with sustained high temperatures increase the likelihood of grid scarcity conditions.

• Solar+Storage: Hybrid systems combining generation and storage introduce additional operational complexity. This is particularly true for assets that are ineligible for grid charging and DC-coupled systems. There are trade-offs that must be considered for maintaining an elevated state-of-charge to protect against scarcity risk and management of clipped PV energy to prevent unnecessary losses. value.

SYSO supports a wide range of solar, storage, and hybrid assets in preparing for ISO-NE and PJM’s summer months. We start by reviewing the asset-specific value stack with our clients to ensure alignment of revenue goals and risk tolerance. Defining our summer operating strategy with clients before the start of the season gives SYSO the tools to make critical market decisions during peak load and grid scarcity events. 

Furthermore, our Network Operations Center (NOC) operates 24/7, managing communication protocols, responding to market signals, and overseeing state-of-charge. Through advanced predictive analytics, SYSO identifies anticipated scarcity conditions and implements positioning strategies to ensure asset availability.

Be Summer-Ready with SYSO

The summer season is not simply another operating quarter, it is the critical window during which capacity commitments can matter most. Assets that are prepared strategically will not only fulfill their capacity obligations but will also optimize revenue.

SYSO’s approach is grounded in technical insight, market experience, and continuous operational oversight. Our goal is to ensure each asset is compliant with market rules, profitable, and resilient throughout the summer season.

Whether your asset is participating in the capacity markets for the first time or is a seasoned resource, now is the time to evaluate readiness.

Contact our team today to schedule a summer performance review and ensure your asset is positioned for success in the peak months ahead.