Moody’s Investors Service issued a report earlier this week saying an abundance of cheap, clean-burning Marcellus Shale gas threatens to “wreak havoc” in the electric generation market in the PJM area, which covers all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and Washington, DC. According to Moody’s researchers, a large influx of natural gas power plants entering PJM Interconnection, due to cheap gas supplies from the Marcellus Shale, will pose “severe challenges for generators operating in the region” in the next few years. Because of the Marcellus “glut,” new plants coming online will drive down power prices, which “could lead” to widespread closures of coal power plants, and pressure operating margins for all generators, including other gas-fired plants. The prediction is that a low-price Armageddon will result in widespread corporate casualties. What can be done to avoid this hideous future? Nothing. The only thing power plant operators can do is cut their debt load, which they are doing. In other words, good old American competition (coming from Marcellus Shale gas) is making the PJM electric industry get leaner and more efficient. Imagine that…
Moody’s Investors Service issued a report earlier this week saying an abundance of cheap, clean-burning Marcellus Shale gas threatens to “wreak havoc” in the electric generation market in the PJM area, which covers all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and Washington, DC. According to Moody’s researchers, a large influx of natural gas power plants entering PJM Interconnection, due to cheap gas supplies from the Marcellus Shale, will pose “severe challenges for generators operating in the region” in the next few years. Because of the Marcellus “glut,” new plants coming online will drive down power prices, which “could lead” to widespread closures of coal power plants, and pressure operating margins for all generators, including other gas-fired plants. The prediction is that a low-price Armageddon will result in widespread corporate casualties. What can be done to avoid this hideous future? Nothing. The only thing power plant operators can do is cut their debt load, which they are doing. In other words, good old American competition (coming from Marcellus Shale gas) is making the PJM electric industry get leaner and more efficient. Imagine that…