30 April 2021
Most of the nuclear plants in the PJM Interconnection wholesale electricity market – covering 13 US states and the District of Columbia – will not produce enough revenue to remain economically viable in the coming years, an independent economic evaluation has concluded.
The independent study by Potomac Economics was commissioned by NEI (Image: NEI)
Potomac Economics, which has 20 years of experience as the Independent Market Monitor (IMM) for four of the USA’s regional power markets, was asked to carry out the evaluation by the US Nuclear Energy Institute (NEI). Its analysis, A Review of Nuclear Costs and Revenues in PJM, accurately evaluates “avoidable” costs of PJM’s fleet and compares them to “realistic” revenues from PJM’s energy, ancillary services and capacity markets, NEI said, as well as recognising operational and market risks that must be considered in accurately assessing the costs of the continued operation of nuclear plants.
Declining energy prices and associated revenues in recent years have substantially reduced the net revenues of all PJM’s nuclear resources, the analysis found. “As energy prices have fallen to their lowest levels in decades in 2020, we find it unlikely that any of the nuclear resources in PJM are covering their costs. Although all of the forward energy prices are significantly higher than the prevailing prices in 2020, we find that it is unlikely the market revenues will be…