Define "market clearing" in the context of PJM.

Market clearing in the context of PJM refers to the process by which energy prices are determined based on the balance of supply and demand in the energy market. This mechanism ensures that the total amount of electricity produced meets the total demand from consumers at any given time. When market clearing occurs, it identifies the price at which the quantity of electricity supplied equals the quantity demanded, resulting in an efficient allocation of resources.

This process involves various participants in the energy market, including generators who supply power and consumers who demand it. It operates under the principles of a competitive market where prices fluctuate based on the availability of supply and the level of consumer demand. When demand exceeds supply, prices rise, providing signals for generators to increase production or for consumers to reduce usage. Conversely, if supply exceeds demand, prices fall, encouraging consumption or discouraging generation.

The other options do not accurately reflect the definition of market clearing. Storing excess energy pertains to energy management and grid stability, while energy efficiency programs and tariff reductions relate to broader policy and regulatory measures in the energy sector. These aspects, while important, do not directly define the concept of market clearing in the PJM context.