Talen Energy, an independent power producer, on Nov. 11 announced a long-term capacity sale of 750 megawatts to an investment grade counterparty in the PJM Interconnection.
The seven-year agreement covers PJM Delivery Years 2029/2030 through 2035/2036 and is expected to generate approximately $100 million per year in revenue.
Talen listed the following key strategic highlights:
- Ten years of capacity visibility: The Guernsey Power Station will contribute 750 MW of accredited capacity under the agreement, covering the 2029/2030 through 2035/2036 PJM Delivery Years. In combination with the cleared capacity auctions, Talen said it now has ten years and approximately $1 billion of cumulative capacity revenue visibility from these megawatts.
- Locks in long-term contracted capacity payments: The transaction highlights the long-term value of Talen’s operating assets in PJM as demand for power grows.
- Increases contracted gross margin: Together with an AWS long-term contract, this agreement increases the contracted share of Talen’s gross margin to 40% through 2036. This improves the cash flow visibility and reduces the overall risk profile associated with the Company’s earnings, it said.
In addition, Talen has entered into separate agreements to contract the remaining 588 MW of available capacity at Guernsey for the 2029/2030 PJM Delivery Year and 702 MW from the Waterford Energy Center for three years, covering PJM Delivery Years 2029/2030 through 2031/2032.
These additional agreements bring the total contracted capacity from the transaction to over two gigawatts for PJM planning year 2029/2030 and 1.45 GW for planning years 2030/2031 and 2031/2032.
