The greenies can’t do math..

shut all the dedicated coal and natty gas plants down because of global warming.. convert to wind turbines and solar panels.. then boost demand by over 50% with EVs..

uhm.. ain’t gonna work.

https://www.realclearenergy.org/articles/2024/08/12/pjm_auction_a_strong_indicator_america_needs_more_electricity_1051149.html

First, the results: The RTO Zone clearing price rose nearly tenfold from $28.92 to $262.92 per MW-day. Meanwhile, the Baltimore zone cleared at $466.35 per MW-day, up from $73.00 in the prior auction, and the Dominion zone cleared at $444.26 per MW-day. While corks may be popping for some of the generators active in PJM, customers are in for higher electric bills as PJM tries to induce more capacity into its market for 2026 delivery.

While PJM’s top-down engineered price formation bears only a passing resemblance to true bottom-up price emergence from willing sellers to willing buyers, the massive jump in capacity prices sends a blaring signal: PJM is glaringly short of capacity. This shortage means electricity prices will be much higher in the region as consumers are ultimately on the hook for these new capacity payments. Nonetheless, when capacity prices reveal this much volatility, it raises two questions for customers and regulators:

1.   Will these new capacity auction prices succeed in inducing new generation into the market?

2.   Will policymakers and customers tolerate the jarring capacity price volatility shock, or will they push for regulatory and political changes?

The question of whether the capacity auction results will succeed in inducing new generation into the market (or convincing older, inevitably thermal assets to stay in the market) is tough. The mismatch between capacity markets looking forward three years and new asset investments lasting 20, 30, or 40 years has always been a challenge for capacity market designers.

As an investor, do I sink hundreds of millions or billions of dollars into an asset whose capacity payment is only assured for three years? Particularly for dispatchable thermal resources, would high-capacity payments in three years trigger a commitment of capital to be earned back over decades when policies and political forces aim to strand that asset sooner rather than later? For new nuclear investments, the market viability for existing nuclear units in RTOs has been so precarious that many states opted to subsidize their nuclear generation. Even for hybrid renewable/storage generation projects, with the lowered accredited capacity values and historic capacity market price volatility over the years, does the project pencil financially?