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PJM Nodal Pricing and Grid Congestion: Key Drivers through 2030

The report’s key takeaways include the following:

  • Nodal pricing can represent sizeable opportunities or challenges for assets in PJM; locational prices are strongly impacted by retirements, new generation, load growth, and transmission upgrades and have historically been very persistent.
  • An iterative approach using both market and network models yields the most consistent basis and capacity expansion outcomes.
  • Several key developments will change the nodal price distribution landscape in PJM in the coming decade. We tested and highlighted the impacts of two of these:
    • PJM is expecting substantial thermal retirements (~30 GW of coal by 2030). These retirements can increase LMPs in surrounding areas, with effects felt across multiple states as generators throughout the system compensate for the lost capacity.
    • While overall annual load growth in PJM is expected to be moderate at 1%, it could surpass 20% in northern Virginia due to strong data center growth, potentially causing a significant basis to zonal price if load additions and line upgrades are not closely coordinated. Dominion’s current strategy is one recent example of coordination between state, PJM, and TO.

Download a redacted sample of the report below.

Interested in the full report? For more information contact Jay DeCunzo

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