PJM Generation Retirements of 8.7 GW May Disrupt Power Markets in Late May, New Genscape Study Reports

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Price spreads of $45-68/MWh possible; Genscape analysts deliver power market transparency with proprietary, real-time insights and intelligence

PJM Price Scenarios, Week 3-4, May 2015

PJM Price Scenarios, Week 3-4, May 2015

“If the scheduled June 1 retirements come off in May, which isn't unlikely, we'll see prices approaching $70/MWh in Week 4 of May," Diana Chiyangwa, regional director of PJM market intelligence at Genscape, explained.

Over 1.4 GW of capacity is set to retire in the month of May in PJM. These are followed by another round of retirements set for June 1, 2015, when over 7.3 GW of capacity is scheduled to ramp offline (PJM; May 1, 2015: http://www.pjm.com/planning/generation-deactivation/gd-summaries.aspx). Should any of the units slated to retire on June 1 come offline in May, there is significant bullish risk to prices, especially during the last week of May, according to Genscape analysis.

“Our PJM analysts conducted a ‘stress test’ scenario analysis for each week in May based on historical and forecasted demand,” explained Diana Chiyangwa, regional director of PJM market intelligence at Genscape. “If the scheduled June 1 retirements come off in May, which isn’t unlikely, we’ll see prices approaching $70/MWh in Week 4 of May.”

The retirements that are coming in June are major, baseload coal units in Western PJM, including Big Sandy (800 MW), Tanners Creek (988 MW), Muskingum River (1,400 MW), and Sporn (600 MW). Despite new builds of major gas-fired generators, the overall impact of the scheduled retirements is expected to cast a shadow on the market. New plants include Warren County (1,400 MW), West Deptford (754 MW), and Nelson Energy (628 MW).

In addition to providing the impact scenario analysis of planned generation retirements, Genscape’s study examined the demand forecast, natural gas constraints, and congestion in PJM for the month of May. Genscape’s latest blog post, “8.7 GW in Upcoming PJM Generation Retirements Could Disrupt Power Markets,” (http://info.genscape.com/87-gw-upcoming-pjm-generation-retirements-could-disrupt-power-markets-pr) discusses the findings of this study in greater detail.

The analysts behind Genscape’s market study offer daily and weekly updates on regional market conditions based on expert analysis and proprietary, real-time plant and transmission data. Additional information about Genscape’s Power Market Intelligence services is available at: info.genscape.com/power-market-intel-051315

About Genscape

Genscape is the leading global provider of real-time data and intelligence for commodity and energy markets, driven to improve market transparency and efficiency. With thousands of patented monitors strategically deployed worldwide, Genscape is unique in its ability to collect and report proprietary market fundamentals in real-time or near real-time. Genscape delivers innovative solutions across a number of asset classes including: Oil, Power, Natural Gas and LNG, Agriculture, Petrochemical and NGLs, Maritime, and Renewables. Genscape clients often gain important insights, improve risk management, or increase operational efficiency. For more information, please visit: http://www.genscape.com

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Molly Robinson
Genscape, Inc.
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