March 18, 2019 Read More →

Natural gas generation tops coal in PJM market for first time

S&P Global Market Intelligence ($):

In a historic first for America’s largest wholesale electricity market, natural gas-fired power generation in 2018 exceeded coal-fired generation across the footprint of the PJM Interconnection, according to the grid operator’s independent market monitor.

Monitoring Analytics LLC’s newly released “2018 State of the Market Report for PJM” observed that overall generation across PJM’s market increased 3.6% to 837,648 GWh in 2018 from about 808,230 GWh in 2017. PJM’s footprint extends across the territory of 13 states in the Midwest, Mid-Atlantic and South as well as the District of Columbia.

At a March 14 media briefing in Washington, D.C., Monitoring Analytics President Joseph Bowring said 2018 notably saw natural gas-fired megawatt-hours exceed coal-fired megawatt-hours in PJM “for the first time ever.”

While nuclear power remained the largest fuel source for PJM by generating a slightly smaller 34.2% of the region’s electricity in 2018 (down from 35.6% in 2017), coal’s share of the market fell 6.6% from 2017 to constitute 28.6% as natural gas’ share increased 18.2% to generate 30.9% of PJM’s electricity for the year. Renewables’ share remains quite small in PJM in 2018, Bowring noted, with wind coming in at 2.6%, hydropower at 2.3% and solar at 0.3%.

Concerning the financial health of generating units within PJM, the IMM report shows that while nearly every gas-fired and hydro facility fully recovered its avoidable costs from all markets in 2018, only 63% of coal-fired units did so, up from 36% in 2017. In comparison, 84% of nuclear power units recovered all of their avoidable costs in 2018, up from 53% in 2017.

Looking forward, the IMM predicted that PJM’s nuclear fleet — except the single units at FirstEnergy Corp.’s Davis-Besse and Perry plants in Ohio and Exelon’s Three Mile Island facility in Pennsylvania, all of which are seeking early retirements — will continue to cover their avoidable costs and also bring in revenue, albeit in expected declining amounts through 2021. Along with the three at-risk nuclear units, the IMM also identified 24 coal-fired units at risk of retirement, with a total combined at-risk capacity of 14,954 MW.

 

More ($): PJM market monitor says average LMP increased 23% in 2018 as gas overtook coal

 

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