A new study by the Rocky Mountain Institute (RMI) suggests solar, wind, and storage facilities are outperforming natural gas. The RMI investigated future plant construction in the ERCOT and PJM markets. The goal was to pinpoint which power sources will receive investment money in the future.
The RMI noted the interconnection queues offer “a leading indicator of market trends for new power plants.” According to the RMI, the investment money going to each type of power source reveals where the market is headed.
“Over the past two years, interconnection queue data from PJM and ERCOT have shown a drastic shift away from new gas and a steep rise in renewable energy projects,” wrote the RMI. “In these two regions, investors finance projects based on expected returns in the competitive market—not based on expectations of cost recovery allowed by regulators of monopoly, vertically-integrated utilities. In other words, this trend represents the shifts in internal risk and reward calculus among investors in highly competitive markets, and reflects a market-based, consensus view of the underlying economic value of different power sources.”