Assessing the economics of newbuild gas plants in the PJM market

Over the past several years, an unprecedented amount of new capacity has been added to the PJM footprint, at a time of negligible electricity demand growth, a shift towards policy-backed resources, and the emergence of new technologies. This report explores the potential equity investor returns for planned combined cycle gas turbines in PJM. Analysis results indicate that the current tranche of plants straddles target IRRs in the mid-teens.