PJM and the impact of Pennsylvania’s carbon pricing

Pennsylvania is putting measures in place to join the Regional Greenhouse Gas Initiative (RGGI) in 2022, which will introduce carbon pricing to the state. This will make Pennsylvania the first major US producer of fossil fuel generated electricity to put a carbon price on its thermal generators.

This is expected to impact PJM Interconnection’s supply dynamics materially. Investors who had previously been attracted to Pennsylvania by its low natural gas prices are now likely to reconsider the location of their thermal new build.

At the same time renewable economics in Eastern PJM are expected to improve further. Carbon leakage may become an important topic until more PJM member states join the RGGI or a federal initiative for carbon pricing takes off.

In this webinar, Claire Behrens, Ingolf Dorn and Filipe Sim-Sim discuss how Pennsylvania has come to join RGGI, the expected changes to PJM’s supply dynamics and the impact on the decarbonisation of PJM.

The slide pack and recording are below.