The Capacity Expansion Model (CEM) determines the optimal mix of new generation and storage capacity to meet demand reliably and cost-effectively over the forecast horizon. Near-term buildout is anchored to interconnection queue analysis, while longer-term decisions are optimized. The same approach applies across NYISO, MISO, and PJM: annual investment decisions run to 2050, hourly dispatch is solved on representative days, reliability is enforced through a Planning Reserve Margin (PRM) with technology-specific derating, and the XPRESS solver is shared with the PCM.
For further details on the core CEM methodology, see the core model documentation.
Methodology common to all regions
At a glance
| Parameter | Value |
|---|---|
| Horizon | Annual investment decisions to 2050 |
| Temporal resolution | Hourly dispatch on representative days |
| Windowing | Rolling 1-year optimization (co-optimized investment + dispatch) |
| Reliability | Planning Reserve Margin (PRM) with technology-specific derating |
| Solver | XPRESS (same as PCM) |
Build candidates
Technologies available for new capacity investment are solar PV, onshore wind, gas CCGT, gas CT, and battery energy storage in multiple durations (2hr, 4hr, 6hr, 8hr). Offshore wind is available as a candidate in NYISO and PJM, but not in MISO.
Technologies not modeled as build candidates use predetermined buildout from interconnection queues and official plans: nuclear, large hydro, pumped storage.
Retirements
Unit retirements are modeled exogenously as inputs to the model and are informed by a multitude of sources with priority given to more stable/reliable sources. Near-term unit retirements are primarily determined by Approved Generator Deactivations lists from each ISO such as PJM, MISO, and NYISO via the quarterly STAR process. Refinements and updates were made to better incorporate the latest information from the DOE’s 202C Orders that granted extensions to various power plants deactivation processes.
PJM and MISO Longer term retirement assumptions are based on the most recently available Utility Integrated Resource Portfolios (IRPs) such as Dominion, Xcel Energy, APCo and more. Recognizing the fluidity of IRP-based retirement dates, additional information such as FERC/PUC/ orders or owner publications (quarterly earnings reports/calls) were used to refine these dates further. When no plant-level data was found, the generic fall back is an age-based retirement methodology based on asset operational lifetimes. Additional refinements were made to incorporate the impact operational lifetime extensions due to installation of new equipment for operational or environmental reasons.
NYISO retirement assumptions were modeled differently and closely resemble the age-based, firm derate approach that NYISO used in the 2025-2034 Comprehensive Reliability Plan (CRP).
Interconnection queue analysis
Near-term capacity additions are anchored to active interconnection queue data from each ISO. Queue projects are filtered by likelihood, technology, and geographic constraints before entering the model. Near-term build years are locked to the filtered queue, so the CEM does not add new capacity in those years, and endogenous CEM builds in later years are bounded by siting limits. Region-specific queue mechanics and filters are described in each region below.
Technology cost projections
CAPEX and OPEX for all candidate technologies are sourced from NREL Annual Technology Baseline (ATB), converted to the model’s currency base year (2025 real USD).
Assumptions and caveats
- CEM uses representative days with hourly dispatch, not full-year chronological simulation.
- Rolling 1-year windows mean the model does not co-optimize across multiple investment years simultaneously.
Regions
NYISO
Geography: NYISO (11 zones, A–K).
The build candidate set includes offshore wind alongside solar PV, onshore wind, gas CCGT, gas CT, and battery storage.
Buildout
Capacity buildout for NYISO by technology, combining the interconnection queue (near term) with economic CEM builds, shown as cumulative capacity added by 5-year milestone.
NYISO queue
NYISO queue processing applies several filters:
- Moratorium town exclusion: BESS projects within 10 km of moratorium towns are excluded
- Phase 1 interconnection cost screening: projects with prohibitively high interconnection costs are filtered out
- Cluster queue filtering: projects filtered by commercial operation date horizon (4 years) and likelihood threshold (50%)
- Annual BESS cap: maximum ~1,000 MW storage per year in the near-term, based on 3 ISC tenders leading up to 2030
Policy and market features
NYISO Capacity Market: NYISO uses an ICAP demand curve to set capacity prices across four nested localities. Technology-specific Capacity Accreditation Factors (CAFs) determine how much capacity credit each resource receives. See Capacity Prices for full methodology, CAF tables, and data sources.
RGGI carbon budget: The RGGI carbon budget also constrains CEM build decisions. See Emissions & Policy for the budget and CCR mechanics.
Renewable energy credits: PTC and ITC values by technology are embedded in the investment economics, reducing the effective CAPEX of eligible renewables and storage.
Build constraints
- IC queue anchoring: near-term builds (first 5 years) are constrained to match filtered IC queue projections; CEM does not build in those years
- NYISO BESS cap: 1,000 MW/year near-term from ISC tenders
- Per-node and global limits: loaded from CSVs and validated for consistency
- Minimum project sizes: technology-specific minimums from NREL ATB
Assumptions and caveats
- NYISO BESS CAFs decline over the forecast horizon (e.g., 2hr BESS NYCA CAF drops from 0.74 in 2025 to 0.14 by 2044), reflecting increasing storage saturation.
- Offshore wind capacity is limited to zones with modeled interconnection points.
Data sources
| Source | Description | Link |
|---|---|---|
| NYISO IC Queue | Active and cluster queue data with project costs | NYISO |
| RGGI | CO2 budget and allowance auction data | RGGI |
| NYISO ICAPWG | CAF methodologies and TSL floor updates | NYISO ICAPWG |
MISO
Geography: MISO Local Resource Zones (LRZs).
The build candidate set covers solar PV, onshore wind, gas CCGT, gas CT, and battery storage. Offshore wind is not modeled in MISO.
Buildout
Capacity buildout for the MISO footprint by technology, combining the interconnection queue (near term) with economic CEM builds, shown as cumulative capacity added by 5-year milestone.
MISO queue
Near-term capacity additions are anchored to MISO’s interconnection queue, read from two pipelines: the Generation Interconnection (DPP) interactive queue and the Expedited Review (ERAS) queue. Because most queued projects never reach operation, the raw queue is derated to a buildable schedule through three sequential filters:
- Withdrawal probability: each DPP project is weighted by its likelihood of completion, from historical phase-to-completion conversion rates and a within-phase progress adjustment. ERAS projects pass through at full weight because they hold firm interconnection agreements.
- Commercial-operation date estimation: unreliable application in-service dates are replaced with empirical time-to-completion by technology and study phase.
- Locational caps and build-rate pacing: cumulative per-LRZ capacity caps (from MISO Futures siting) and annual build-rate limits pace construction. ERAS projects bypass the cumulative caps but are still paced.
State storage mandates (Illinois, Michigan, Minnesota, Missouri, Indiana) act as near-term floors and ceilings, though in practice buildout is driven by ERAS commitments and surviving DPP projects more than by mandate enforcement.
Beyond the queue horizon, the CEM builds capacity endogenously.
Policy and market features
State clean-energy mandates: State-level clean-energy and storage mandates across the MISO footprint are enforced as CEM constraints. See Emissions & Policy for the state-by-state policies. MISO is not a RGGI region, so no regional carbon constraint shapes the buildout.
MISO capacity market: MISO procures capacity through the seasonal Planning Resource Auction (PRA). See Capacity Prices for accreditation methodology and requirements.
Assumptions and caveats
Data sources
| Source | Description | Link |
|---|---|---|
| MISO IC Queue | Definitive Planning Phase queue data with technology mapping | MISO |
PJM
Geography: PJM transmission zones.
The build candidate set includes solar PV, onshore wind, offshore wind, gas CCGT, gas CT, and battery storage.
Buildout
Capacity buildout for the PJM footprint by technology, combining the interconnection queue (near term) with economic CEM builds, shown as cumulative capacity added by 5-year milestone.
PJM queue
Near-term capacity additions are anchored to PJM’s interconnection queue, drawing on both the serial queue and the transition-cycle projects from PJM’s move to a cycle-based, first-ready process. Projects carry capacity, location, technology, and commercial-operation date. In the near term, buildout relies solely on the queue and the CEM adds no new capacity of its own. The CEM is then given increasing headroom to build as the horizon approaches 2030, to account for cycle projects in the early phases of interconnection studies.
Build constraints
- Per-node and global limits: Informed by PJM planning studies
Policy and market features
PJM capacity market: PJM procures capacity through the Reliability Pricing Model (RPM). See Capacity Prices for accreditation and the VRR curve.
Data sources
| Source | Description | Link |
|---|---|---|
| PJM IC Queue | Interconnection queue data with technology mapping | PJM |
Data sources
Sources common to all three regions:
| Source | Description | Link |
|---|---|---|
| NREL ATB | CAPEX/OPEX projections for all candidate technologies | NREL ATB |
| EIA-860 | Existing fleet characterisation and retirement dates | EIA-860 |
Region-specific sources are listed within each region above.