Keeping the Lights on with Unit Deactivations

Exploring-PJM-IconKeeping the Lights On. It’s PJM’s first priority.

As a part of this mandated responsibility, PJM develops plans to ensure the reliability of the electric transmission system.

But, how does PJM do this with generators that deactivate or retire?

Generating unit deactivations can contribute to the need for future, baseline reliability transmission upgrades to mitigate reliability criteria violations. Generators retiring could require transmission upgrades to keep electricity flowing freely over the transmission lines. PJM, however, cannot order generators to stay in service.

Generator deactivations alter power flows that may yield transmission line overloads or other reliability criteria violations.

To avoid reliability concerns, PJM identifies transmission solutions that allow owners to retire generating plants as requested without threatening reliable power supplies. PJM has no vested interest in either keeping a plant running or closing down, but must make sure the transmission system is reliable and can serve demand for electricity without issue.

Generation owners weigh investments and operational costs against anticipated revenues fromLearning-Center-Gen-Deactivations-body-copy-image PJM markets and existing power purchase agreements to determine the economic viability of a facility.

Costs – such as those to address environmental regulations – are one factor that put a plant at risk. In addition, existing generating plants ability to compete is affected by fuel costs and lower costs from more efficient new plants. Units also compete with renewable energy resources, demand response and energy efficiency programs.

PJM applies a standard set of criteria to identify potential transmission system problems due to a specific generator retiring.

To keep the grid reliable, PJM orders transmission owners to build transmission upgrades or additions to accommodate generating plant retirements. PJM also requires 90-day notice from a generation owner which intends to retire a unit; most generators give more than the required notice.

The sooner the generating plant owner informs PJM of its intent to retire a plant, the sooner PJM can study the transmission system and mandate upgrades if necessary.

Since 2011, the PJM Board has approved 187 baseline transmission projects totaling approximately $4.6 billion to allow 23,843 megawatts of generation to deactivate without reliability issues. This includes six baseline projects totaling $27.34 million the board approved in 2015 to accommodate 926 MW of deactivations.

For perspective, PJM has had more than 24,000 MW of generation actually retire since Jan. 1, 2011.