Renewable generation in PJM has been increasing over the past few years and will play a larger role in the market’s resource mix going forward. Coal-fired capacity is retiring at a rapid pace, and the interconnection queue is heavily comprised of renewable capacity. There is approximately 133 GW of utility-scale solar, wind, and offshore wind projects with queue positions in various stages of development.
In the short-term, ESAI Power expects Class I REC prices to increase as state Renewable Portfolio Standard (RPS) requirements ramp-up, resulting in REC demand outpacing supply. However, as more renewable capacity, including substantial offshore wind capacity, enters the market, REC prices are expected to fall off significantly after 2026.
Over the past few years, several PJM states made significant revisions to their RPS. Maryland, New Jersey, Virginia, and Delaware increased their annual RPS requirements. These revisions have a bullish impact on future REC prices. Check out the full Renewables Watch report for an in-depth briefing on each state’s policies.
ESAI Power’s Class I REC forecast and projected supply / demand balance incorporate all pertinent legislative changes, the PJM load forecast, all existing capacity and expectations for future renewable supply additions. Subscribers can check out the recent Renewables Watch for in-depth price forecasts and analysis.
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