Publicly traded independent power producers (IPPs) are poised for a significant shift as renewable energy continues to reshape the generation mix. Enverus Intelligence® Research’s latest report explores how evolving generation and price forecasts will impact IPP profitability.
The retirement of thermal plants across the Lower 48 presents a growing challenge for dispatchable generation. We project that IPP-installed capacity and annual generation will decline through 2035 as coal and distillate plants are phased out. However, IPPs operating in high net-load zones – such as PJM and MISO – will find lucrative opportunities, leveraging price volatility driven by renewable integration.
In the near term, revenue from dispatchable generation is expected to rise through 2030. Market dynamics are shifting, with lower prices during peak solar and overnight wind hours but higher prices in the mornings and evenings, creating opportunities for dispatchable assets. However, by 2035, the wave of retirements will begin to constrain generation capacity, putting downward pressure on revenue potential.
The revenue potential of IPPs looks vastly different from just a few years ago when renewables were expected to drive thermal retirements and push these assets out of the market. Instead, evolving market dynamics and increasing price volatility are creating new opportunities for dispatchable generation, allowing IPPs to capitalize on pricing spikes and strategic dispatch in high net-load periods.
Research Highlights
- Dispatch to Dollars – Market Forecasts Driving IPP Profits – This report examines the implications of Enverus Intelligence® Research’s long-term power price and dispatch forecasts on our view of future earnings potential for publicly traded independent power producers.
- Midstream Opportunities – L48 Gas-Fired Power Growth Potential – This report examines which midstream operators hold the most gas pipeline capacity near increasing load and retiring coal-fired power plants and projects the volume growth potential for each operator.
- Power Demand Growth – Myth Versus Reality – This updated slide deck, first presented Feb. 26 in collaboration with Pickering Energy Partners, examines critical issues impacting the future of power demand.
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts, and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.
