Last week, Genscape recorded two key series of events in the PJM power market:
On Tuesday, April 14, WHUB locational marginal pricing during the day’s on-peak period was significantly higher than expected, as the market had been trading below $40.00/MWh as late as 8:40 AM ET. Most notably on this expensive day, was the ratio of congestion costs to energy costs. Genscape’s blog post, “Emergency Transmission Outage Drives Volatility in PJM,” explains that marginal congestion costs were almost equal to energy costs.
On Friday April 17, FirstEnergy shut Lake Shore, East Lake, and Ashtabula, which represented 0.9 GW combined coal-fired generation. With recent increases in environmental regulations and changes in EPA policy, as well as the economic incentives and proven environmental benefits associated with converting to natural gas, it’s expected that the closure of these three plants signals the start of a larger coal-fired plant closure trend across the Midwest. Genscape’s recent blog post, “FirstEnergy Coal-Fired Plant Closings,” details why these closures are taking place and future implications and expectations for power generation in the region.
