Marginal Fuel Switching and Price Volatility in PJM
36 Pages Posted: 10 Feb 2019
Date Written: January 28, 2019
Abstract
We use emergency outages of coal and gas generators in PJM as an exogenous source of variation in the power generation stack to study how changes in the marginal fuel source affect real-time wholesale electricity prices. Our results cast significant doubt on anecdotal evidence that natural gas generation leads to higher electricity price volatility. We find that wholesale prices are less volatile when natural gas is on the margin more often.
Keywords: Price Volatility, Natural Gas, Coal, Emergency Outages
JEL Classification: G1, G13, Q02, Q41
Suggested Citation: Suggested Citation
Saretto, Alessio and Shcherbakova, Anastasia and Lin, Jeremy, Marginal Fuel Switching and Price Volatility in PJM (January 28, 2019). Available at SSRN: https://ssrn.com/abstract=3324592 or http://dx.doi.org/10.2139/ssrn.3324592
Register to save articles to
your library
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.
