Senior Economist, PJM Interconnection, USA
Track B, Session 11
"Potential Effects of Proposed Climate Change Policies on PJM’s Energy Market"
The effects of potential climate change policy outcomes, modeled as different prices on carbon dioxide (CO2) emissions, on wholesale market prices, generation dispatch, energy expenditures, and emissions for PJM’s Energy Market for the year 2013. At forecast fuel prices for 2013, generation dispatch would remain largely unaffected in PJM for CO2 prices up to $35-$40/ton resulting in minimal emissions reductions, and regardless of natural gas prices 75-80 percent of the CO2 price, expressed in dollars per short ton, is transmitted to increases in average wholesale energy prices. Sensitivity analyses regarding the effects of different amounts of energy efficiency, modeled as reductions in total energy consumption, and wind generation deployment mitigates the wholesale energy price and expenditure impacts of climate change policies, and results in larger emissions reductions that would be observed with only generation re-dispatch as an emissions mitigation option.