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How does the commodity forecast account for planned natural gas fired generation in the PJM queue and the expansion of natural gas exports when developing natural gas price assumptions?
ICF accounts for expected generation development when developing natural gas price assumptions. Assumed generation builds—both renewable and thermal—are informed by the PJM interconnection queue, along with ICF’s judgment regarding which projects are likely to be constructed based on current market conditions and recent trends. ICF generally considers a project to be a firm build if (1) the project is under construction, or (2) it meets two of the following 4 criteria: (i) fully permitted, (ii) fully financed, (iii) PPA secured for at least 50% of output, and/or (iv) cleared in the PJM BRA. For renewables, ICF considers those projects firm if (1) the size is larger than 20 MW and (2) an interconnection agreement has been secured.
Beyond those assumed builds, ICF’s modeling framework allows additional supply to be developed economically based on projected natural gas prices and market conditions. As fuel demand increases due to new generation, those dynamics are reflected through the broader supply and demand relationships embedded in the forecast.
With respect to natural gas exports, ICF does not model individual liquefied natural gas (LNG) export projects explicitly within the PJM natural gas price forecast. Instead, expectations regarding export growth and global market conditions are reflected in the baseline natural gas price outlook used in the forecast, which is informed by publicly available sources such as the Energy Information Administration’s Annual Energy Outlook which incorporates assumptions about domestic production, infrastructure, and international trade over time.
As a result, anticipated impacts of increased exports and broader market integration are captured implicitly through forecast price trajectories rather than through discrete modeling of PJM specific linkages to international gas markets.