Talen Energy agreed to sell 750 megawatts of accredited capacity under a seven-year deal, adding contracted revenue as regional grid operator PJM Interconnection works to address a capacity shortfall.
The agreement covers capacity from Guernsey Power Station for delivery years 2029/2030 through 2035/2036. Talen said Nov. 11 it expects about $100 million in annual revenue. It described the buyer as investment grade but did not name the counterparty.
Talen also disclosed contracts for Guernsey’s remaining 588 MW for 2029/2030 and for 702 MW from Waterford Energy Center over 2029/2030 through 2031/2032. The agreements cover more than 2 gigawatts for 2029/2030 and 1.45 GW in each of the following years, 2030/2031 and 2031/2032, the company said.
Talen estimates roughly $1 billion in capacity revenue over 10 years from the 750 MW at Guernsey, counting the new agreement and capacity cleared in auctions. The company said the new deal, counted alongside its separate long-term agreement with Amazon Web Services, would cover 40% of its gross margin through 2036. Talen Chief Executive Mac McFarland said, “This agreement locks in capacity economics while preserving our energy market upside.”
The deal comes as PJM responds to electricity demand from large loads growing faster than new supply. The grid operator said its two most recent capacity auctions marked the first time the entire region had fallen short of its reliability requirement. PJM’s proposed backstop procurement aims to address an estimated 6,800 MW gap from the 2028/2029 auction, though the operator said it will recalculate the figure using updated information. Under the proposal, charges would be allocated to load-serving entities based on large-load growth and each zone’s contribution.
PJM’s next Base Residual Auction, covering the 2029/2030 delivery year, is scheduled for December 2026.
