Maintaining reliability while supporting the needs of the rapidly changing energy landscape remains PJM’s guiding focus, PJM President and CEO Manu Asthana said in his keynote address Monday at the 2023 PJM Annual Meeting of Members, held in Cambridge, Maryland.
Opening the Members Committee meeting May 1, Asthana highlighted milestones achieved last year, beginning with the landmark interconnection reforms crafted through extensive stakeholder compromise and collaboration and approved by the Federal Energy Regulatory Commission.
“That complicated piece of work is a big deal for us. It is a big deal from a reliability perspective. It is a big deal from an energy transition perspective. It is a big deal from the perspective of helping our states and our members reach their energy transition goals,” Asthana said.
To help speed queue interconnection, PJM’s new Queue Scope Tool, introduced in 2022, offers developers a way to more quickly and cost-effectively evaluate the viability of potential power projects.
Equally important, he said, were PJM’s contributions to efficiently facilitate state energy policies. Use of the State Agreement Approach made possible the cost-effective, reliable evaluation and advancement of proposals for 7,500 MW of new wind resources. Just last week, he noted, PJM and the New Jersey Board of Public Utilities announced a second round to efficiently plan transmission to accommodate up to 11,000 MW of offshore wind by 2040.
This record, he said, provides a template through which PJM can help other states.
While logging these significant milestones, PJM and stakeholders also:
- Submitted a detailed filing to allow distributed energy resources to participate in the PJM markets through FERC Order 2222
- Successfully completed the Quadrennial Review process, in which unprecedented stakeholder participation helped shape a filing that intended to reduce over-procurement
- Implemented historical simulation methodology to better manage risk in the Financial Transmission Rights Market
- Through the Resource Adequacy Senior Task Force, laid the foundation for the current, accelerated stakeholder Critical Issue Fast Path process that aims to reform PJM’s capacity market rules
- Responded to FERC’s Notice of Public Rulemaking on long-term transmission planning for the grid of the future
Reliable Operations in Extreme Weather
Asthana also emphasized how PJM and its members preserved reliability through extreme weather events, including storms affecting Ohio energy customers last June and wide-ranging impacts of Winter Storm Elliott in December.
“Probably the most important thing through all of this is how we worked together with our members to keep the bulk power system going,” he said. “It really was a big achievement to keep the grid reliable.”
PJM’s Role In Maintaining Reliability Ahead
Asthana commended members for their commitment to reliability as he outlined challenges in the near and long term.
PJM operations, markets and planning functions are evolving to maintain reliability as renewables and consumer preferences for decarbonization transform the energy landscape – a challenge he said is common to grid operators worldwide.
PJM and its stakeholders are positioned to move forward successfully, Asthana said. PJM has a 95-year record of success in grid operations and planning since 1927. In addition, PJM’s 25-year history of energy markets has facilitated emissions reductions and economic dispatch for savings of between $3 billion and $4 billion annually.
“They have worked. They have withstood the test of time for almost a century for operations and planning, and a quarter century for markets,” Asthana said, noting the grid’s recent shift from a grid powered mainly by coal to one in which natural gas is the leading fuel. “This is not our first transition. It is something we and our markets and our stakeholders have navigated successfully.”
“The way to figure out that evolution is together. Since I came in, I have strongly supported the stakeholder process as a way to solve difficult problems,” Asthana said. “It is most effective when all of our expertise comes together in a respectful manner, and we work constructively to achieve an outcome.”
In the wake of Winter Storm Elliott, the Capacity Performance construct may need review, he said. He also noted that PJM received a significant amount of generation retirement notices last year. Among other closely monitored trends, capacity auction results show that reserve margins continue to tighten, and PJM projects that those margins will tighten even more.
That said, Asthana emphasized that action on resource adequacy is not only necessary but underway. This includes the Critical Issue Fast Path process ordered by the PJM Board of Managers to seek improvements to capacity market design related to resource adequacy. Stakeholder collaboration is the key to durable solutions needed, he said.
“I strongly believe RTOs and organized markets are the most efficient and transparent way to achieve the transition we are in the middle of,” he said.
Members Committee Chair Emphasizes Shared Reliability Goal
David “Scarp” Scarpignato, chair of the PJM Members Committee, followed Asthana in capping recent accomplishments and struggles, with a focus on reliability.
“Last year, the defining accomplishment or struggle for PJM at large was Elliott and how well our market reliability procedures and rules worked,” he said. “We, collectively, did keep the lights on.”
Meanwhile, unforeseen challenges posed by extreme weather raise questions to be resolved, he said. Issues include the accuracy of price signals, the need for a market-price circuit breaker, the Market Seller Offer Cap, load forecasting and gas-electric coordination, he added.
Moving forward, PJM and stakeholders must expand on the industry’s strong shared culture of safety and create a “permeating, permanent culture of reliability,” or CORe, he said.