Energy transition likely requires market changes, transmission growth, PJM finds

Dive Brief:

  • The PJM Interconnection’s markets and transmission planning will likely need to evolve to handle high penetrations of renewable energy, according to a study the grid operator released Wednesday.

  • The analysis shows the advantages of robust interconnections between grid systems, PJM said in the report, Energy Transition in PJM: Frameworks for Analysis. PJM’s power exports to other markets increased by 140% under a high renewables scenario, and its exchange with the Midcontinent Independent System Operator peaked at more than 20 GW flowing through existing points of interconnection.

  • “This study represents an important step in understanding how PJM can best work to facilitate the energy transition and make the grid of the future possible,” Manu Asthana, PJM CEO and president, said in a statement. PJM plans to follow up the report with studies focusing on issues like essential reliability services, transmission expansion and market design.

Dive Insight:

The report is a “good step forward” in showing the gaps in the PJM’s markets as renewable energy increases across its footprint, according to Mike Jacobs, a senior energy analyst at the Union of Concerned Scientists.

“There’s a cold reality here for everybody,” Jacobs said. “What PJM has provided to us is showing the warts on this system, as well as … the general view of how [adding renewables] is going to work.”

In the study, PJM looked at a base scenario with 10% renewable penetration, a “policy” scenario of 22% by 2035 that matched state energy goals in the PJM area and an accelerated scenario of 50% renewables by mid-century. PJM gets about 6% of its electricity from renewable resources.

PJM renewable energy expansion scenarios

Retrieved from

PJM Interconnection

on December 15, 2021


Under the scenario with 50% renewables, PJM found there would be periods when energy production overwhelms demand, leading to about 10% curtailment of renewable facilities. Also, congestion on PJM’s transmission system would increase by 50%, according to the report.

“These results suggest an opportunity for strategic regional transmission expansion, grid-enhancing technologies, and an increased need for storage,” PJM said in the report.

The report found that key services provided by thermal power plants decline with high levels of renewables, which in some cases aren’t as effective at providing inertia, primary frequency response, reactive capability, ramping, regulation, fuel assurance and black start capabilities.

“Absent any reform, as the penetration of renewable resources increases, there is an overall decline in essential reliability services,” said PJM, which runs the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia.

PJM said its analysis of essential reliability services highlighted an opportunity for increased coordination between the Federal Energy Regulatory Commission, the North American Electric Reliability Corporation (NERC) and states. 

NERC’s grid reliability standards do not apply to resources connected at the distribution level, but FERC Order 2222 opens an avenue for distributed energy resources (DER) to participate in wholesale electricity markets and provide value to the grid, PJM said. 

“As the penetration of DER increases in the grid, it will be critical to hold DER to an appropriate level of performance, cybersecurity and reliability standards,” the grid operator said.

Under a scenario with 50% renewables by 2050, the PJM’s annual energy market revenue shrinks 40% to $12.7 billion compared to $22.1 billion under a “base” scenario, according to the report.

“It’s important that PJM do this kind of work to really think holistically about how its markets and the infrastructure that it operates are going to need to adapt to the energy transition,” Jeff Dennis, Advanced Energy Economy managing director and general counsel, said, noting the grid operator plans to keep updating the study.

The report highlights the importance of grid flexibility, both on the generation side and on the load side, according to Dennis.

ISO New England and the New York Independent System Operator are also studying how their systems may be affected by a shift in generating resources during the energy transition, Dennis said.

PJM said its study indicated an increased need for operational flexibility, with steeper ramps, frequent dispatch of generators to their economic minimum and lower capacity factors for natural gas- and coal-fired power plants.

The report also shows how regional markets can support a reliable and cost-effective shift away from a system based on fossil-fueled power plants as well as the need for new transmission and regional power lines, Dennis said.


via Utility Dive

December 16, 2021 at 10:25AM

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