Dive Brief:

• Power prices will likely rise because of the expected retirement of 59 GW to 77 GW of coal fired power plants over the next five years in the U.S., according to a study by the Brattle Group, a consulting firm.
• In the eastern PJM region, peak prices could increase by up to $11/MWh and off-peak prices could climb by $6/MWh, assuming the coal-fired plants are replaced by gas-fired units, the report said.
• Coal plant retirements will not have a major effect on capacity prices, the report said.

Dive Insight:

“It is likely that reduced supply for electricity generation, increased operating costs, and shifts in fuel demands due to retirement and retrofitting of coal plants will drive up market prices,” the report said. “While it is not clear how much, if any, of these effects are already reflected in current forward prices, the price effects are large enough to be a material risk factor for plant economics in the first decade of coal plant retirements.”