October 7, 2020 Read More →

New PJM gas plants face growing suite of obstacles to solvency

Utility Dive:

AEC researcher and report co-author Bryndis Woods has a message for anyone considering buying or financing a gas plant: “Buyer beware.”

“The headwinds facing new PJM gas plants are growing stronger and stronger,” Woods said in a statement.

Among those headwinds is a “massive oversupply” of generating resources in the PJM market, according to the researchers. They say since 2002, PJM peak demand has grown by 1% while total generating capacity is up 173%. There are also high-risk global events, including the coronavirus pandemic and extreme weather disruptions including heat waves, cold snaps, hurricanes, and high tide flooding.

“Individually, each of these risks could perhaps be factored into a project’s financing,” Dennis Wamsted, an IEEFA analyst and report co-author, said in a statement. “Taken together, they pose virtually insurmountable hurdles for new gas-fired projects in the region.” 

[Robert Walton]

More: ‘Buyer beware’: Report highlights challenges to new PJM gas plants

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