PJM Interconnection President and CEO Manu Asthana testified June 1 before the U.S. Senate Committee on Energy and Natural Resources on PJM’s efforts to identify and address challenges to the reliable delivery of electricity during the ongoing transformation of the electrical grid.

Asthana’s testimony also marked the launch of PJM’s multi-year Ensuring a Reliable Energy Transition initiative to offer solutions to these reliability challenges through research, analysis and collaboration across government and industry.

“It is clear that this transition is happening – and PJM is committed to facilitating it, reliably and as cost-effectively as possible, using the power of competitive markets,” Asthana told the Committee. “We have taken significant steps toward this goal, including major interconnection reform, which is expected to result in the processing of over 200 gigawatts of new generation requests in the next three years.”

Keeping power flowing during the transition will require collaboration and action from industry and government sectors, informed by data and analysis including PJM’s series of research papers on the challenges and opportunities presented by these revolutionary changes, he said.

Asthana noted that the U.S. electric grid is experiencing an accelerating transition toward the use of intermittent renewable generation. This transition is primarily driven by local, state and federal policies, combined with consumer decisions, aimed at mitigating the critical risk posed by climate change. This transition is evident in PJM’s interconnection queue, which currently includes more than 250,000 MW of generation to be studied for interconnection, 97% of which is either renewable or batteries or a hybrid of both.

Although PJM has sufficient generation to meet the needs of our system today, Asthana testified, demand is growing with the electrification of transportation, industrial and building sectors, along with the development of energy-intensive data centers in the PJM footprint. At the same time, fossil fuel generators that balance the grid today are retiring at a significant rate, while the primarily renewable resources seeking interconnection in PJM are not being built at the pace required to replace these resources.

“If these trends continue, our models show increased risk of having insufficient resources later in this decade to maintain the reliable electric service that consumers expect,” Asthana’s written testimony stated.

This is not a concern unique to the PJM grid. The North American Electric Reliability Corporation’s (NERC) recent summer assessment indicated that roughly two-thirds of the U.S. already faces increased resource adequacy risk this summer. PJM was not among those regions found to be at risk this summer.

Industry and policymakers can take steps now to address these concerns, Asthana said. These steps include implementation of policies that accelerate the pace of new generation and transmission entry; adoption of policies that slow down the retirement or restriction of existing generation until replacement generation is deployed and operational at scale; and an approach to policymaking that expressly considers reliability impacts in the development phase of the policy and not after the fact.

Asthana testified that competitive markets reinforce short- and long-term grid reliability by using market signals to incentivize both investment in new generation and replacement of older, less efficient generation. In combination with PJM’s operations and planning functions, markets provide up to $4 billion in annual efficiencies in the PJM footprint alone.

“Competitive markets are a proven tool that can deliver a more efficient energy transition,” he stated in his written testimony.

PJM embraces its role to help reliably facilitate this industry transition, he said, and has already taken significant measures on that front, such as:

— Reform of the interconnection process that is expected to result in the processing of over 200,000 MW of new generation requests in the next three years

— Deployment of the State Agreement Approach to facilitate 7,500 MW of offshore wind in New Jersey

— Coordination with state and federal governments on maintaining system reliability while developing and implementing their specific energy policies.

PJM will continue to work with stakeholders to further accelerate the interconnection of new generation, enhance its forward-looking transmission planning process, and appropriately value the reliability attributes needed to support a system that is more reliant on just-in-time fuel resources.

PJM is also launching its Ensuring a Reliable Energy Transition initiative to bring all of its activities targeted at ensuring a reliable transition under a single umbrella.

PJM Initiative Calls for Specific Critical Actions

Building on a foundation of research, analysis, recent events and stakeholder exchange over the past several years, Ensuring a Reliable Energy Transition proposes an initial set of actions to support reliability that PJM can take with its stakeholders, government and industry over the immediate, near-term and upcoming time frames to keep pace with these trends:

• Immediate: Supporting the performance of existing generation resources
• Near Term: Ensuring that the system maintains adequate resources and deliverable watts to meet electricity demand
• Upcoming: Attracting and maintaining (as needed) resources that have essential reliability services 

Winter Storm Elliott underscored the immediate concern. The near-term and upcoming concerns reflect conclusions from PJM’s ongoing public analysis and study of the energy transition.

As noted in PJM’s report Energy Transition in PJM: Resource Retirements, Replacements & Risks (PDF), PJM projects in the near term that electricity demand will continue to rise while more than 20% of PJM’s generators (~40 MW) are expected to retire by 2030. At the same time, the generation resources expected to replace them are not entering the system at a rate that keeps pace with retirements.

As to the upcoming challenges, PJM concluded in its report Energy Transition in PJM: Frameworks for Analysis (PDF) that the system will continue to need thermal resources for the essential reliability services they provide until a replacement technology is deployable at scale.

Essential reliability services are defined by NERC as the ability of a generation resource to provide services such as voltage control, frequency support, and ramping capability to balance the electrical grid and maintain the reliable delivery of electricity.

As part the initiative, PJM is proposing an initial set of actions to support reliability and try to alleviate these concerns. Some of these actions are already underway in our stakeholder process, while others have not yet begun. PJM believes it has the stakeholder processes, information and subject matter expertise to play a leadership role in facilitating this transition reliably, in tandem with its stakeholders and the Federal Energy Regulatory Commission.

The initial set of 16 actions are available on the new Ensuring a Reliable Energy Transition webpage. They include actions in PJM’s core subject matter areas of markets, planning and operations, as well as external advocacy-based actions. PJM will add additional action items as needed and based upon PJM’s final Winter Storm Elliott report.