FERC Technical Conference Takes on Future Grid Market Designs


PJM participated in a Sept. 14 Federal Energy Regulatory Commission technical conference, “Energy and Ancillary Service in the Evolving Electricity Sector,” which sought industry considerations on the design of markets and operations for the challenges posed by the influx of renewable generation.

As more renewable, intermittent resources serve the grid, the demand for operational flexibility also will likely increase to maintain system reliability. In turn, RTO/ISO markets must ensure incentives are in place to incentivize operational flexibility.

“There are no issues more fundamental to good market design than the ones we are talking about today, that we get the incentives in the real-time time frame correct, and we articulate the products clearly,” said Adam Keech, Vice President – Market Design & Economics. “That starts with the real-time markets.”

PJM’s markets are evolving in step with the needs of the grid of the future. Resource commitment, decommitment and ramping capability are considered by PJM to be the most critical types of flexibility required in energy and ancillary services markets, he said.

Renewable resources account for nearly all resources that have applied to connect to the grid via PJM’s interconnection queue. As a result, PJM’s largest uncertainty today remains load forecast error, Keech said. A load forecast error of even 1% at a load of 100,000 MW, far less than PJM’s peak load, creates the potential need for an additional 1,000 MW of flexibility beyond the 1,500 MW PJM traditionally procures as synchronized reserves. PJM anticipates the power system shifting from one that has historically been predictable and controllable to one that is less so in the future. This rise in uncertainty must be met with flexibility to manage the grid reliably and cost-effectively,” Keech said in testimony submitted to FERC (PDF).