trending Market Intelligence /marketintelligence/en/news-insights/trending/-yZFTyzEzhvJChd56xPXCw2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Execs see coal-fired opportunities, storage in play in Western US power markets

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions

Essential Energy Insights - May 28, 2020

Essential Energy Insights - May 14, 2020


Execs see coal-fired opportunities, storage in play in Western US power markets

Despite some U.S. power market challenges, opportunities remain for a range of generation resources including coal-fired assets in PJM Interconnection and long duration storage in western U.S. states, but the next five years could see market dynamics change significantly, executives and analysts said Oct. 22.

"We've been seeing the retirement of coal and nuclear generation assets [and their replacement] by natural gas and renewables, but now this year we are seeing energy storage being added," Paul Browning, CEO of Mitsubishi Hitachi Power Systems Americas Inc., told S&P Global Platts' Financing US Power Conference in New York.

Another year-over-year change the gas turbine manufacturer is seeing is the amount of attention hydrogen is getting for storage applications, Browning said. The company is storing hydrogen in salt caverns in Utah as it expects the fuel to be important for long duration energy storage applications, he said.

However, while long duration energy storage could gain traction in Western U.S. markets where coal-fired capacity has been retired and renewable energy penetration is significant and growing, market opportunities for coal in places like PJM could exist for some time.

Darren Olagues, CFO at GenOn Holdings Inc., said the company owns about 3,000 MW of coal in PJM and while tough to finance, "if you can get the cost structure right there is an optionality held inside those coal plants that can be very profitable in short periods of time."

Projecting the future of the coal industry in 10 years is a little easier, Olagues said, as many plants existing today will be shut down. "But in five to 10 years it starts to get murky and in zero to five some plants may continue to shut down, but I don't think the coal industry will end in the next five years," he added.

The coal trend will be interesting to watch and the outcome of the next PJM auction will be a "tell-tale sign of what happens to a bunch of coal plants," Olagues said.

Capacity market reform

Asked about pending PJM capacity market rules currently in front of the U.S. Federal Energy Regulatory Commission, the panelists had a mix of perspectives.

Aside from being "pro-markets," NRG Energy Inc. does not have an opinion on the outcome at FERC, Gaetan Frotte, senior vice president and treasurer, said.

Frotte said the company hopes PJM's capacity auction schedule returns to normal in 2020 when two auctions could be held due to the federal regulatory delay regarding rules designed to accommodate greater volumes of subsidized resources.

One thing to pay attention to and expect is a protracted delay across the next three PJM capacity auctions, Julien Dumoulin-Smith, managing director and head of U.S. power, utilities and alternative energy research at Bank of America Merrill Lynch, said.

"The impact of what that does to the ability to clear new assets is not trivial," Dumoulin-Smith said.

Browning said PJM was a well-functioning market four or five years ago, but with a lot of the state actions that have happened recently, "PJM is sort of broken right now."

If that remains the case for five or 10 years, he said, there may be more bilateral power purchase agreements that bypass PJM auctions. The new model if the current model remains broken could involve more corporate power purchase agreements, he added.

But the picture may not be that bleak, according to at least one observer.

"We talk about PJM being broken when the reality is a lot of the deal flow really since 2014 for banks has come from PJM," Ravina Advani, head of natural resources and renewables coverage at BNP Paribas, said.

Jared Anderson is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.