Low natural gas prices and environmental regulations have led to a significant shift in the United States’ power infrastructure. Utilities continue to retire coal-fired power plants and build new natural gas generators. Because natural gas prices vary more than coal prices, some worry that this will lead to more volatile electricity prices. However, the coal-to-gas fuel switching not only generates environmental benefits. The ability of natural gas generators to respond more efficiently to variation in market conditions appears also to lower the volatility of wholesale power prices.
Shcherbakova, Anastasia (2019). Financial Implications of Coal-to-Gas Fuel Switching. Mosbacher Institute for Trade, Economics & Public Policy. Available electronically from http://hdl.handle.net/1969.1/187017.
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