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Market Reports

The Altenex Market Report – Spring 2017: PJM Market Overview

The report is authored by the Edison Energy Supply Team: Emily Williams, Director of Supply; Mary Kate Francis, Energy Supply Associate; and Charley Hildt, Energy Supply Analyst.

This article is adapted from the Altenex Market Report – Spring 2017, a comprehensive assessment of the policy, technology, and pricing developments shaping the North American renewable energy market.

About PJM: PJM is the largest regional energy market, as measured by electricity demand. PJM coordinates the movement of electricity through the Mid-Atlantic states, as well as Ohio and parts of Illinois, Indiana, Kentucky, Michigan, North Carolina, and Tennessee, offering 15 years of historical wholesale power price information that can be useful to businesses and organizations evaluating power purchasing options in the region.

PJM Marketing Report at a Glance

PJM has traditionally been dominated by coal and nuclear power, but an influx of cheap, local natural gas from the Marcellus and Utica Shale basins and a high number of coal retirements has PJM shifting rapidly to natural gas. Meanwhile, wind and solar represent a small fraction of the generation mix. The low price of natural gas brought power prices to a 15-year low in the middle of 2016, and prices have rebounded slightly since then, as seen in the Figure below. While PJM prices are forecasted to remain below 2014 levels, evolving market dynamics subject power prices to the risks of natural gas supply and price volatility.

Monthly Historical and Futures Pricing at PJM AEP-Dayton Hub

Nuclear plants continue to operate in PJM, with some receiving state subsidies that incentivize the plants to run, making it more challenging for other fuels to compete, and suppressing prices in the market.

Pricing can vary significantly between Western and Eastern PJM, with the eastern region typically seeing higher prices than the western region.

What are the advantages of signing a deal in PJM?

[Available only in the full report.]

What are the challenges of signing a deal in PJM?

[Available only in the full report.]

The report is available to Edison Energy clients and to select commercial, industrial and institutional entities, jointly referenced here as C&I buyers. To request a copy of the report, please contact Christen Blum, Edison Energy, at Christen.Blum@EdisonEnergy.com