Past Event

Energy Economics & Finance Seminar

WednesdayJanuary 31, 2018 4:00 - 5:00 PM Kleinman | Free Event Register Here
Location
Kleinman Classroom
220 S. 34th St. Fisher Fine Arts Building, Room 306
19104 Philadelphia , PA
United States
Pennsylvania US
Contact Information

If you are interested in attending, please contact:

Arthur van Benthem (arthurv@wharton.upenn.edu)

  • Jesse Jenkins
    MIT

This seminar series in Energy Economics & Finance (EEF) is organized by Arthur van Benthem and hosted by the Kleinman Center.

The scope of the seminar includes regulation and policy papers. The scope of the seminar also includes environmental and transportation issues, as long as there is a connection with energy. Sessions are biweekly on Wednesdays (see dates below) from 4:00 p.m. – 5:00 p.m in the Kleinman Center classroom—Fisher Fine Arts Room 306.

Beer, wine, and snacks are served! For more information or to attend a session, please contact Arthur van Benthem (arthurv@wharton.upenn.edu).

About the Talk

What’s killing nuclear power in U.S. electricity markets? Drivers of wholesale price declines at nuclear generators in the PJM Interconnection

ABSTRACT:  Electricity market prices across organized wholesale electricity markets in the United States have declined significantly in recent years, prompting several nuclear power stations to consider early retirement before the end of their licensed operation or useful lifespans. There are three likely suspects: (1) cheap natural gas; (2) the growth of subsidized wind generation in the American Midwest; and (3) stagnant or declining demand for electricity. In this work, I employ time series linear regression with time fixed effects to empirically estimate the effect of each likely explanatory variable on the average day-ahead locational marginal price (LMP) earned by 19 nuclear generating stations located in PJM from January 1, 2008 to December 31, 2016. These plants are home to 33 individual reactors, encompassing roughly one-third of the U.S. nuclear fleet. I employ a variety of alternative specifications to further explore geographic heterogeneity in causal effects on different generators across the PJM region and interrogate the impact of using price time series from different natural gas trading hubs. I find that natural gas price declines are the dominant driver of reduced electricity prices at the 19 nuclear power stations over this period. The growth of wind energy has an order of magnitude smaller cumulative effect and is only statistically significant for nuclear generators located in the western portion of the PJM region (in proximity to vast majority of installed wind capacity in the region). Finally, declining demand also has a relatively small but statistically significant effect on prices across all generators.


Spring 2018 Schedule
 
  • 1/31: Jesse Jenkins (MIT)
  • 3/14: Akshaya Jha (CMU Heinz)
  • 3/28: Erik Gilje (Wharton)
  • 4/11: Ashley Vissing (Chicago Economics)
  • 4/25: Jing Li (MIT Sloan)
  • 5/2: Arthur van Benthem (Wharton)
  • 5/9: Christina Simeone & Thomas Lee (Kleinman Center)