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The largest U.S. power grid, PJM Interconnection, could lose as much as 58K MW of mostly fossil fuel power generating capacity by the end of this decade, potentially driving up prices for consumers, according to a report published this week by PJM’s Independent Market Monitor.
More than 33K MW of power are at risk of retirement due to a $49.06/MWh decline in prices in the region’s capacity market in 2023 – the largest annual price drop since the creation of PJM markets in 1999 – as both coal and natural gas prices were lower in 2023 compared to 2022.
Another 19.6K MW face possible early retirement due to state and federal regulatory requirements, the report says.
PJM’s total estimate exceeds last year’s projected power market loss by ~18K MW.
The report warns the retirements could boost utility costs for consumers in the region, which stretches from the mid-Atlantic to Chicago, unless PJM can secure adequate replacement capacity before 2030.
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