2021 in Review: Planning Efforts Focus on Future Grid

2035

Transitioning reliably and cost-effectively to a grid that will incorporate many more renewable resources was a main focus of planning efforts by PJM and stakeholders in 2021.

By the end of 2021, 95% of the more than 225,000 MW in PJM’s new services queue come from proposed solar, wind, storage or hybrid renewable/battery resources.

As the system moves rapidly toward including more of this carbon-free generation, PJM’s interconnection queue has exploded, further challenging an already stressed new-projects pipeline. The number of projects requested through Dec. 13 of 2021 was 1,331, nearly triple the number of requests just three years ago.

PJM initially engaged stakeholders in late 2020 to craft a framework to improve the interconnection process. In 2021, that initiative coalesced in the formation of the Interconnection Process Reform Task Force and a series of workshops to study related policies, including cost-allocation methods.

In particular, the task force looked at:

  • Interconnection studies
  • Cost certainty – including project cost estimates and cost responsibility for network upgrades
  • Interim operations and agreements
  • Requirements for new service requests and for proceeding through the interconnection process, as well as rules around project modifications
  • Opportunities that can reduce the current and future interconnection queue backlog

The overarching goals are to get projects through the interconnection process more quickly and enhance cost transparency.

The task force will be sending proposals to the Markets & Reliability Committee for its consideration this spring 2022, followed by PJM’s filing of suggested Tariff changes with the Federal Energy Regulatory Commission.

The first transmission policy workshop in May featured FERC Chairman Richard Glick, who underlined the importance of the energy transition and stated that transmission planning would be a leading focus of the Commission moving forward.

Focus on Regional Transmission Planning

FERC followed up in July, issuing an advance notice of proposed rulemaking (ANOPR), titled “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection.”

In its comments, PJM listed four principles that should guide any planning reform.

  • Facilitating decarbonization: While ensuring a reliable, resilient transmission grid, planning processes should accommodate the nation’s move toward a more decarbonized future by effectively implementing local, state and federal policies as well as customer demand for reduced carbon electricity.
  • Grid resilience: It is imperative the Commission put in place a common working definition of resilience, as well as resilience-based industry planning drivers to ensure the grid is prepared to withstand or quickly recover from events that pose operational risks.
  • Protecting consumers: Any cost allocation method changes must not result in an unreasonable shift of cost or risk to consumers.
  • Equitable treatment of RTO and non-RTO regions: Any planning reform should be implemented consistently across the nation and should not create disincentives for transmission owners to participate in RTOs.

Facilitating Decarbonization Goals

Planning for the grid of the future includes facilitating states’ decarbonization objectives.

All but three of the states in the PJM region – which includes all or part of 13 states and Washington, D.C. – have renewable portfolio goals.

In 2021, FERC approved PJM’s first-time use of an existing provision in its governing documents, the State Agreement Approach (SAA), to help the state of New Jersey pursue its goal of integrating 7,500 MW of offshore wind generation by 2035.

Typically, projects considered for the Regional Transmission Expansion Plan (RTEP) are driven by reliability or market-efficiency criteria. The SAA enabled PJM to incorporate New Jersey’s public policy goals into both the RTEP and its competitive solicitation process.

PJM received 80 proposals addressing onshore and offshore needs that would facilitate New Jersey’s offshore wind goal. It is in the process of evaluating these proposals, in concert with the New Jersey Board of Public Utilities.

New Jersey is not alone in pursuing offshore wind. Together, the five coastal states in PJM’s footprint have proposed developing more than 20,000 MW of offshore wind.

In October, PJM published the Phase 1 results of its Offshore Wind Transmission Study, a collaborative effort with state agencies to identify transmission solutions across the PJM footprint.

The report found that coordinated regional planning among states could present a more efficient, economic path to achieving these objectives than each state working alone.

Energy Transition Study

In the last weeks of 2021, PJM released “The Energy Transition in PJM: Frameworks for Analysis,” the latest iteration of a multiphase, multiyear effort to analyze the potential impacts of the evolving resource mix, specifically the accelerating integration of renewable resources.

This “living study” will help PJM identify gaps and opportunities in the current market construct and provide insights into the future of market design, transmission planning and reliable system operations.

The exploration of renewable integration is one of multiple, concurrent initiatives in which PJM is serving as an independent authority for data and analysis to help facilitate decarbonization and enable the grid of the future.