Connect with us

Business

Falling Payments on the US Main Power Grid Tightens Coal and Nuclear Power

Published

on

Falling Payments on the US Main Power Grid Tightens Coal and Nuclear Power

Article content

(Bloomberg) – Coal plants, nuclear reactors and other generators will take a hit next year on America’s largest power grid as payments plummet 64% to help keep the lights on from New Jersey to Illinois.

Providers to PJM Interconnection LLC’s network, which serves more than 65 million people, will receive $ 50 a megawatt-day to provide backup capacity for the year beginning June 2022, according to the results of an auction published on Wednesday. It is the lowest price in 11 years.

The results are a particularly hard blow to coal plants and nuclear reactors already struggling to compete. The PJM auction is the biggest event for generators in the eastern US, including Calpine Corp., NRG Energy Inc., and Exelon Corp., because it dictates a large chunk of their future revenue. It also plays a critical role in shaping the region’s electricity mix, determining how much the region is willing to stick with coal and natural gas plants or replace them with wind and solar power.

“I can’t imagine how nuclear power will be able to cover all its fixed costs at such a low price,” said Brianna Lazerwitz, an analyst at BloombergNEF.

Analysts expected the price to fall, but not by that much. A confluence of factors led to the decline. The demand forecast was lower. The transmission capacity was greater. And a flood of new, cheaper-to-build power plants entered the market, pushing down on bids, PJM officials said.

Commercial

Article content

The lower prices could be especially painful for Exelon’s nuclear plants in Illinois, implying a pre-tax hit of $ 900 million, Bloomberg intelligence analyst Kit Konolige said in a research note. Public Service Enterprise Group Inc. could take a $ 200 million hit, he said.

Exelon shares fell 0.8% after the results were released. PSEG fell 0.4%. Exelon did not respond to a request for comment. PSEG declined to comment.

“It’s a direct impact on companies’ income statements,” Gayle Podurgiel, Moody’s energy markets analyst, said in an interview. She predicted it would cause more coal plants to shut down.

Analysts had expected the auction to hurt renewables and nuclear power, while potentially boosting coal. That’s because the new rules imposed by regulators under former President Donald Trump were designed to mitigate any wind, solar and reactor benefits gained from state subsidies. But in the end, the rule was not a big factor, in part because the sharp drop in prices mitigated the advantages for some participants. In addition, exemptions were granted to many bidders.

“There was probably some impact, but I don’t think it was a big impact,” Stu Bresler, PJM’s senior vice president of market services, said during a briefing.

The price for the Chicago area, which Exelon serves, was $ 68.96 compared to $ 195.55 at the last auction. The price for the Pennsylvania and New Jersey region, including PSEG territory, fell to $ 97.86, from $ 165.73. In total, 144,477 megawatts were cleared, representing a reserve margin of 21%.

Commercial

Article content

Nuclear plants managed to win more contracts in the auction, eliminating an additional 4,500 megawatts from the previous auction in 2018. Wind and solar power added about 1,300 megawatts, and natural gas added 3,400 megawatts. Coal was the big loser, dropping about 8,200 megawatts.

Capacity controversy

Extreme weather blackouts in Texas and California over the past year have reignited a debate over whether other regions should institute capacity systems similar to the one used by PJM. The market, which pays generators to standby in case additional power is needed, has long been a source of controversy. While it makes the network more reliable, the system increases costs for consumers. In the area around Chicago, for example, these charges total more than $ 1.7 billion per year, representing 20% ​​of customer bills, according to the Illinois Clean Jobs Coalition.

New pricing rules imposed by federal regulators under Trump triggered contentious disputes between energy providers, PJM and federal regulators, delaying the auction for two years. However, the new system may be short-lived. The Biden administration is moving to review the rules in time for the next auction in December.

Dominion Energy Inc., one of the largest US utility owners, was pulled from the market due to the rules. The Virginia-based company, which has a goal of net zero carbon emissions by 2050, said the new PJM format will “make renewables more expensive” than delivering clean energy through alternative markets.

Illinois, New Jersey and Maryland have also threatened to exit the capacity market unless the new floor price is removed. PJM has already launched a process to do so.

“After all that fighting, it basically had no impact,” said Bloomberg NEF’s Lazerwitz.

© 2021 Bloomberg LP

Bloomberg.com

Commercial

In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

Software solutions and services to help organizations navigate thousands of grants and incentives throughout North America.

Comments

Postmedia is committed to maintaining a lively but civilized discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to moderate before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications – you will now receive an email if you receive a response to your comment, there is an update to a comment thread you follow, or if a user you follow comments. Visit our Community Principles for more information and details on how to adjust your E-mail settings.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement
Advertisement

Lifestyle

The 7 best epic novels you will want to read and reread over and over again The 7 best epic novels you will want to read and reread over and over again
LifeStyle7 hours ago

The 7 best epic novels you will want to read and reread over and over again

Despite concerns about the early pandemic that eventually run out of good TVHonestly, I don’t feel like we’ve ever done...

6 small patio design ideas to make the most of your space 6 small patio design ideas to make the most of your space
LifeStyle7 hours ago

6 small patio design ideas to make the most of your space

I think we can all agree that this summer More than ever We are excited to do each and every...

Food delivery companies are popping up in S’pore, but complaints are on the rise Food delivery companies are popping up in S’pore, but complaints are on the rise
LifeStyle8 hours ago

Food delivery companies are popping up in S’pore, but complaints are on the rise

It seems that negative comments about food delivery companies abound online. A quick glance at the Facebook pages of the...

How are delivery-only food and beverage brands affected in cloud kitchens during MCO? How are delivery-only food and beverage brands affected in cloud kitchens during MCO?
LifeStyle9 hours ago

How are delivery-only food and beverage brands affected in cloud kitchens during MCO?

With dinners banned during closures, many restaurants have had to switch online and offer their wares through delivery and takeout....

Malaysian indie game developer behind The Company Man Malaysian indie game developer behind The Company Man
LifeStyle10 hours ago

Malaysian indie game developer behind The Company Man

At a time when many of us are WFH and lacking office culture (or not, there is no judgment here),...

Coworking and coliving hotel in Gua Musang, Kelantan Coworking and coliving hotel in Gua Musang, Kelantan
LifeStyle12 hours ago

Coworking and coliving hotel in Gua Musang, Kelantan

Only recently have we noticed new coworking space launches in Klang Valley slowing down. Considering the pandemic and travel restrictions,...

4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry 4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry
LifeStyle23 hours ago

4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry

In a dream world, healthy, nutrient-dense meals would be easily accessible to everyone. Buying quinoa, leafy greens, and other superfoods...

Where the magic of Tata Harper happens Where the magic of Tata Harper happens
LifeStyle1 day ago

Where the magic of Tata Harper happens

Tata Harper is famous for doing most of the manufacturing of her clean, natural skincare on her farm in Vermont,...

The Best Summer Pasta Salad Recipe You Must Try This Season The Best Summer Pasta Salad Recipe You Must Try This Season
LifeStyle1 day ago

The Best Summer Pasta Salad Recipe You Must Try This Season

I am currently sitting in my parents’ backyard, an oasis in the heart of Northern California, it is my happy...

Top 9 Dating Apps For 30s – Time To Find The Real Deal! Top 9 Dating Apps For 30s – Time To Find The Real Deal!
LifeStyle1 day ago

Top 9 Dating Apps For 30s – Time To Find The Real Deal!

Even if you’re the type of person who loves the thrill of the hunt, the seemingly endless dating carousel can...

Advertisement

Sport

Canadiens signs VP of hockey operations John Sedgwick to three-year extension Canadiens signs VP of hockey operations John Sedgwick to three-year extension
Sports9 mins ago

Canadiens signs VP of hockey operations John Sedgwick to three-year extension

We have sent an email with instructions to create a new password. Your current password has not been changed. We...

Adams: Packers players don’t talk about Rodgers situation Adams: Packers players don’t talk about Rodgers situation
Sports16 mins ago

Adams: Packers players don’t talk about Rodgers situation

Apparently, Packers players aren’t discussing the Aaron Rodgers situation and what it will mean if the reigning MVP doesn’t return...

Settlement reached in Kobe Bryant helicopter crash lawsuit Settlement reached in Kobe Bryant helicopter crash lawsuit
Sports31 mins ago

Settlement reached in Kobe Bryant helicopter crash lawsuit

FILE – Investigators work at the scene of the helicopter crash, where former NBA star Kobe Bryant and his 13-year-old...

Euro 2021: Portugal vs France and Germany vs Hungary, Euro 2020 LIVE: Preview, expected line-up, team news and where to watch Euro 2021: Portugal vs France and Germany vs Hungary, Euro 2020 LIVE: Preview, expected line-up, team news and where to watch
Sports38 mins ago

Euro 2021: Portugal vs France and Germany vs Hungary, Euro 2020 LIVE: Preview, expected line-up, team news and where to watch

HHello everyone and welcome to this blog live for the night of this Wednesday. Euro 2020 Group F games, between...

Watch Live: Canucks Introduces Sedins as GM Special Advisers Watch Live: Canucks Introduces Sedins as GM Special Advisers
Sports53 mins ago

Watch Live: Canucks Introduces Sedins as GM Special Advisers

Following Tuesday’s announcement that Henrik and Daniel Sedin will rejoin the Vancouver Canucks as special advisers to the general manager,...

Phillies manager Joe Girardi explains decision to have Max Scherzer searched for sticky material Phillies manager Joe Girardi explains decision to have Max Scherzer searched for sticky material
Sports59 mins ago

Phillies manager Joe Girardi explains decision to have Max Scherzer searched for sticky material

Say it’s not like that, Joe. Max Scherzer was checked for sticky material three times Tuesday night, the second day...

Kris Bryant happy about MLB’s crackdown on foreign substances Kris Bryant happy about MLB’s crackdown on foreign substances
Sports60 mins ago

Kris Bryant happy about MLB’s crackdown on foreign substances

Kris Bryant is speaking out in defense of MLB for its foreign substance checks on pitchers. Some pitchers have spoken...

Gilas Pilipinas, China ends the set-up in a draw Gilas Pilipinas, China ends the set-up in a draw
Sports1 hour ago

Gilas Pilipinas, China ends the set-up in a draw

Gilas Pilipinas in the 2021 Fiba Asia Cup qualifiers. PHOTO OF THE FIBA ​​ASIA CUP MANILA, Philippines – The Philippines...

Ashlyn Harris comments on USWNT Olympics loss: ‘I won gold … when my daughter was born’ Ashlyn Harris comments on USWNT Olympics loss: ‘I won gold … when my daughter was born’
Sports1 hour ago

Ashlyn Harris comments on USWNT Olympics loss: ‘I won gold … when my daughter was born’

Ashlyn Harris wanted a chance to compete with the United States women’s national team in Tokyo for the Olympics. But...

Vanessa Bryant Settles Wrongful Death Lawsuit Vanessa Bryant Settles Wrongful Death Lawsuit
Sports1 hour ago

Vanessa Bryant Settles Wrongful Death Lawsuit

Vanessa Bryant agreed to settle a wrongful death lawsuit against the helicopter company involved in the crash that killed her...

Advertisement

Entertainment

Alex Rodriguez has no plans to date Alex Rodriguez has no plans to date
Entertainment8 mins ago

Alex Rodriguez has no plans to date

June 23, 2021 Alex Rodriguez has no plans to date “for a while.” Jennifer Lopez and Alex Rodriguez The 42-year-old...

Laurence Fishburne and Amber Midthunder! Laurence Fishburne and Amber Midthunder!
Entertainment10 mins ago

Laurence Fishburne and Amber Midthunder!

Friday, Liam Neeson Returns For Some Action In New Netflix Thriller THE ICE ROAD. Directed by Jonathan Hensleigh, the new...

Big Tech Antitrust Legislation Arrives Before House Judiciary Committee – News Block Big Tech Antitrust Legislation Arrives Before House Judiciary Committee – News Block
Entertainment11 mins ago

Big Tech Antitrust Legislation Arrives Before House Judiciary Committee – News Block

UPDATE, 9:57 AM PT: The House Judiciary Committee advanced the first half dozen bills targeting big technologies, passing a bill...

The John Early Incancelable |  Vanity fair The John Early Incancelable |  Vanity fair
Entertainment19 mins ago

The John Early Incancelable | Vanity fair

In the middle of my talk with Early john, you get a call, and then another call, and also a...

Porsha Williams shows off a tattoo of her fiancé’s name as Simon Guobadia jokes about the RHOA star on his 40th birthday Porsha Williams shows off a tattoo of her fiancé’s name as Simon Guobadia jokes about the RHOA star on his 40th birthday
Entertainment26 mins ago

Porsha Williams shows off a tattoo of her fiancé’s name as Simon Guobadia jokes about the RHOA star on his 40th birthday

Porsha williams shows off his new neck tattoo like Simon Guobadia sprouts on him Real Housewives of Atlanta star on...

Critic Meghan Markle and Prince Harry face horrific death threats Critic Meghan Markle and Prince Harry face horrific death threats
Entertainment30 mins ago

Critic Meghan Markle and Prince Harry face horrific death threats

Reporter criticized Prince harry as well as Meghan Markle reportedly received horrific death threats specifically targeting her children following her...

The trailer for the novel Once Upon a Time in Hollywood shares new images The trailer for the novel Once Upon a Time in Hollywood shares new images
Entertainment32 mins ago

The trailer for the novel Once Upon a Time in Hollywood shares new images

A stylish trailer for Quentin Tarantino’s upcoming novelization ONCE UPON A TIME IN HOLLYWOOD has arrived on set. The trailer...

Lou Ferrigno on what to avoid in the new She-Hulk series Lou Ferrigno on what to avoid in the new She-Hulk series
Entertainment33 mins ago

Lou Ferrigno on what to avoid in the new She-Hulk series

The OG Hulk also gave his pick on which recent actor has best portrayed the Marvel superhero. With Mark Ruffalo...

Tori Spelling and the ups and downs of Dean McDermott Tori Spelling and the ups and downs of Dean McDermott
Entertainment42 mins ago

Tori Spelling and the ups and downs of Dean McDermott

Donna Martin’s onscreen drama has nothing to do with it Tori spellingit’s real life. The Beverly Hills, 90210 alum and...

Rachel Lindsay talks about Bach’s venomous fanbase and how the show uses it as the symbolic leader of blacks Rachel Lindsay talks about Bach’s venomous fanbase and how the show uses it as the symbolic leader of blacks
Entertainment52 mins ago

Rachel Lindsay talks about Bach’s venomous fanbase and how the show uses it as the symbolic leader of blacks

Rachel Lindsay’s first-person story “Rachel Lindsay No Roses Left to Burn” (as Allison P. Davis recounted) for New York Magazine...

Advertisement

Tech

PairTree, a platform that facilitates adoptions, raises $ 2.25 million to help launch a corresponding app PairTree, a platform that facilitates adoptions, raises $ 2.25 million to help launch a corresponding app
Tech7 mins ago

PairTree, a platform that facilitates adoptions, raises $ 2.25 million to help launch a corresponding app

PairTree CEO Erin Quick and her adopted son and daughter. (Photo courtesy of Quick) New financing: ParaTree, a platform that...

What is Facebook?  – The New York Times What is Facebook?  – The New York Times
Tech14 mins ago

What is Facebook? – The New York Times

This article is part of the On Tech Newsletter. You can sign up here to receive it during the week....

FI Scouts is an iPhone application to gain your financial independence FI Scouts is an iPhone application to gain your financial independence
Tech18 mins ago

FI Scouts is an iPhone application to gain your financial independence

Source: Christian Mitteldorf FI Scouts is a new iPhone application designed to help you on your path to financial independence....

Apple TV + shares the first trailer for ‘Watch the Sound With Mark Ronson’ Apple TV + shares the first trailer for ‘Watch the Sound With Mark Ronson’
Tech29 mins ago

Apple TV + shares the first trailer for ‘Watch the Sound With Mark Ronson’

The first trailer for the Apple TV + documentary series “Watch the Sound With Mark Ronson” features Angel Olsen, Charli...

Warren Buffett resigns from Gates Foundation board Warren Buffett resigns from Gates Foundation board
Tech36 mins ago

Warren Buffett resigns from Gates Foundation board

Warren Buffett announced Wednesday that he will donate $ 4.1 billion of Berkshire Hathaway stock to five foundations, and that...

Delhi HC refuses to suspend Competition Commission investigation into WhatsApp privacy policy – Technology News, Firstpost Delhi HC refuses to suspend Competition Commission investigation into WhatsApp privacy policy – Technology News, Firstpost
Tech40 mins ago

Delhi HC refuses to suspend Competition Commission investigation into WhatsApp privacy policy – Technology News, Firstpost

Press Trust of IndiaJune 23, 2021 9:52:31 PM IS New Delhi: The Delhi High Court has refused to suspend notice...

‘Foundation’ and ‘The Problem With Jon Stewart’ Debuts on Apple TV + in September ‘Foundation’ and ‘The Problem With Jon Stewart’ Debuts on Apple TV + in September
Tech51 mins ago

‘Foundation’ and ‘The Problem With Jon Stewart’ Debuts on Apple TV + in September

Apple has shared a September release window for two of its upcoming Apple TV + shows: “Foundation” and “The Problem...

Harrison Ford hurts his shoulder in Indiana Jones set 5 while rehearsing a fight Harrison Ford hurts his shoulder in Indiana Jones set 5 while rehearsing a fight
Tech58 mins ago

Harrison Ford hurts his shoulder in Indiana Jones set 5 while rehearsing a fight

Harrison Ford injured his shoulder. Lucasfilm Harrison ford injured his shoulder on the set of the fifth installment of Indiana...

SpaceX plans to offer global Starlink coverage by September SpaceX plans to offer global Starlink coverage by September
Tech1 hour ago

SpaceX plans to offer global Starlink coverage by September

Something I look forward to: Even if you don’t live in an area covered by Starlink, chances are good that...

Amazon says Prime Day was the “ largest two-day period in history ” for its third-party sellers Amazon says Prime Day was the “ largest two-day period in history ” for its third-party sellers
Tech1 hour ago

Amazon says Prime Day was the “ largest two-day period in history ” for its third-party sellers

(Photo from Amazon) Amazon said on Wednesday that this week’s Prime Day sales event, which ended Tuesday, was the largest...

Advertisement
Advertisement