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Risks Outweigh Rewards for Investors Considering PJM Natural Gas Projects

10.01.2020 Publication.png

Client: Energy Foundation

Authors: Bryndis Woods, PhD, Liz Stanton, PhD, Eliandro Tavares, Sagal Alisalad, Myisha Majumder; and Dennis Wamsted from the Institute for Energy Economics and Financial Analysis (IEEFA)

October 2020

On behalf of the Energy Foundation, the Applied Economics Clinic and the Institute for Energy Economics and Financial Analysis (IEEFA) prepared a report that assesses the substantial risks to financial entities investing in natural gas-fired power plant development in the Pennsylvania-New Jersey-Maryland (PJM) region—the largest independent power system operator (ISO) in the United States. 

AEC and IEEFA identify six overarching threats that pose growing risks for investors in new PJM gas-fired power plants: increasing price competitiveness of clean solar, wind, demand response and battery storage alternatives; significant existing over-capacity, flat demand growth and market turmoil; high-impact, unpredictable global events such as COVID-19 that radically reshape markets and expectations of future demand; uncertainty over the future direction of gas prices, particularly given the substantial increase in U.S. liquefied natural gas (LNG) exports; actions by state governments within the PJM market to limit future fossil fuel generation and/or even withdraw from the market entirely; and public opposition that can delay project development and raise overall costs.

Link to Report

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tags: Bryndis-Woods, Liz-Stanton, Eliandro-Tavares, Sagal-Alisalad, Myisha-Majumder
categories: Clean Energy, Energy Efficiency, Natural Gas
Monday 10.05.20
Posted by Liz Stanton
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