2023 in Review: Planning for the Reliability of the Future Grid Amid Dynamic Change

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PJM and stakeholders focused their planning efforts in 2023 on the core challenge of ensuring a reliable grid amid the retirement of traditional generators, increasing demand for electricity and the addition of renewable resources that behave differently from traditional fuel-burning generators.

The year began with a long-term load forecast projecting growth in energy demand over the next decade, primarily fueled by data centers being sited in Virginia, Maryland, Ohio and Illinois.

Using improved modeling techniques, the forecast predicted estimated annual growth in customer demand of 0.8% per year for summer peaks, 1% for winter peaks and 1.4% for net energy over a 10-year planning horizon starting in 2023.

Ongoing Study of Energy Transition

This landscape was reflected in the study PJM released in February, Energy Transition in PJM: Resource Retirements, Replacements & Risks (PDF). This analysis was the latest in a multiphase reviewof the potential impacts of the energy transition, and it contained a number of implications for how PJM plans the grid.

The paper documented PJM’s concerns over the combined forces of new electricity demand growth, accelerating retirements of existing generators, and the slow pace of new generation construction.

Largely precipitated by clean energy policies, retirements of traditional generators are at risk of outpacing the construction of new resources. Due to siting, financing, supply-chain and other factors outside of PJM’s control, a number of projects are passing through PJM’s study process but not being built. At the end of 2023, about 40,000 MW of qualified projects had yet to move to construction.

Interconnection Process Reform

To accelerate the process through which new generation resources connect to the grid, in July, PJM began implementing landmark interconnection process reform, which was approved by the Federal Energy Regulatory Commission in November 2022.

These changes are critical for PJM to help states advance their decarbonization goals because it will move requests through the interconnection queue more efficiently and focus on projects that are more likely to get built.

PJM’s reformed interconnection process is expected to clear about 300 new generation projects totaling 26,000 MW in 2024, marking significant progress in the integration of renewables and other generation in the nation’s largest electric grid.

PJM also identified another 46,000 MW of nameplate generation capacity in projects that should clear PJM’s study process and be ready for construction by mid-2025, for a total of 72,000 MW of projects, mostly renewable and battery resources, expected to complete the process by that time.

An additional 100,000 MW of projects is expected to be cleared by the end of 2026.

The transition plan will process enough interconnection requests to make up for retiring thermal generators – and the vast majority of these projects are renewables (wind or solar) or battery, or a hybrid combination of both.

To further simplify the interconnection process for developers of new generation resources, PJM in December updated its public Queue Scope planning tool that lets users visually evaluate the potential impacts of new generation on the power grid.

Queue Scope allows prospective generation developers or other users to assess the location of future generators before they formally enter PJM’s interconnection queue. The new version is integrated with the PJM system map, meaning that users can now visualize how a generator impacts congestion on lines, as well as the potential transmission upgrades that would be needed to interconnect a project.

Helping Enable Offshore Wind

PJM in April reached the next milestone in its historic collaboration with New Jersey, using the State Agreement Approach to advance that state’s offshore wind goals through PJM’s competitive transmission planning process.

The New Jersey Board of Public Utilities formally requested that PJM solicit transmission solutions serving 3,500 MW of offshore wind energy to New Jersey customers by 2040.

This is in addition to the 7,500 MW of energy by 2035 that PJM previously incorporated into its competitive Regional Transmission Expansion Plan (RTEP), also under the State Agreement Approach.

PJM is also working with officials in Maryland and Delaware to study the prospect of offshore wind energy.

Enhancing the Transmission System

Increasing demand for electricity and the drive to decarbonize the grid with the connection of many smaller new resources require an upgraded transmission system.

This challenge was exemplified by the immediate-need projects approved by the Board of Managers in July to begin addressing reliability issues in the Mid-Atlantic region that will be triggered with the deactivation of Brandon Shores 1 and 2 coal units outside of Baltimore. Further projects were approved in October.

Also in October, PJM and stakeholders focused on the results of the 2022 Regional Transmission Expansion Plan (RTEP) Window 3, which ran Feb. 24 to May 31, soliciting competitive proposals to address significant impacts to the grid expected in the near future from new electricity demand combined with the retirement of fossil fuel generators.

The 2022 RTEP Window 3 proposal, approved by the PJM Board Dec. 11, aims to expand the regional transmission system to meet the needs of load growth, generator retirement and future new generation resource capacity in the Mid-Atlantic region.

The grid enhancements are required to maintain reliability as PJM prepares for significant impacts to the grid from up to 7,500 MW of new data centers to be sited in Virginia and Maryland, combined with widespread effects from the deactivation of more than 11,000 MW of generation.

The estimated cost of the combined Window 3 upgrades is approximately $5 billion.

PJM’s emphasis on planning in 2023 reflects a government and industry-wide focus on preparing for the grid of the future.

In step with this movement, PJM has revived its Long-Term Transmission Regional Planning Reform Workshops and looks forward to extensive stakeholder engagement in the New Year on planning a reliable grid.