General Session Explores Global Events’ Impact on the Grid

1835

The General Session panel convened for the 2022 Annual Meeting of Members and explored decarbonization, reliability and resilience, and affordability.

“We are not a policymaker, but we do operate inside a world that policymakers create for us,” noted PJM President and CEO Manu Asthana in introducing the panel, titled “Global Events and the Impacts on the Grid.”

 “Our role is not to find the answers,” he said. “But we do inform policies though our analysis, and we do implement them.”

Asthana set the stage for PJM Board of Managers Chair Mark Takahashi to moderate a discussion among four industry experts:

  • Ben Hertz-Shargel, Ph.D., Senior Fellow, Atlantic Council, who spoke on the global energy crisis
  • Karen Palmer, Ph.D., Senior Fellow, Resources for the Future, who focused on decarbonization and electrification
  • John Drake, Vice President, Supply Chain Policy, U.S. Chamber of Commerce, who talked about policymakers and the global supply chain
  • Paul Stockton, Ph.D., Senior Fellow, Johns Hopkins Applied Physics Laboratory, who presented on securing the zero-carbon grid

The world faces a global energy crisis that’s been months and years in the making, Hertz-Shargel said, and it has recently been exacerbated by the climate crisis, the coronavirus pandemic and Russia’s invasion of Ukraine.

Climate goals and insufficient return on investment have led fossil fuels to retrench, but that hasn’t reduced the demand for them, he said – leading to a huge gap between supply and demand.

Natural gas will be called upon to play a significant role in reliability of the system, he said, at the same time the power sector is competing with liquefied natural gas exports.

These and other factors will drive a massive push toward electrification, he said.

This load growth, along with an increased penetration of renewables and distributed energy resources (DER), will mean the demand side will play a much more active role in ensuring reliability going forward, he said.

Palmer, too, emphasized a coming trend toward electrification of vehicles and heating, and its part in helping decarbonize the grid.

She pointed to President Biden’s goals of a decarbonized grid by 2050. She said that while federal policies associated with the targets are still being developed, what’s evident is that there is a “pretty big difference between aspirations and current trajectory.”

She and her fellow speakers agreed that states will have a big part to play in policymaking.

Echoing the challenge of affordability mentioned by Asthana, Palmer said efficient prices will be needed to decarbonize the grid.

The importance of retail rates in a renewable transition, along with other conclusions voiced by the speakers, dovetailed with a study PJM released earlier in the day, Energy Transition in PJM: Emerging Characteristics of a Decarbonized Grid.

These included the change in system peaks and seasonal resource adequacy.

Stockton agreed that state regulators will be “absolutely vital” in the energy transition – in particular, working across seams to protect against cyberattacks.

The adoption of new technologies and new ways of operating and controlling the grid are introducing new vulnerabilities, Stockton said. At the same time, he said, “Emerging grid architecture is going to give us opportunities to build resilience into our electrical system that before have not been possible.”

For his part, Drake voiced concern over the supply chain, and in particular “general blanket prohibitions” that Congress enacts instead of including screening risks in its policies.

Blanket restrictions are reactionary and ineffective, and they make it more difficult and more expensive for businesses to get the goods they need, he said.

Takahashi closed the session by asking each speaker to offer a piece of advice for PJM.

Palmer said she hopes PJM will continue to think about how to evolve its capacity market in ways that “aren’t antithetical to clean energy.”

Hertz-Shargel stressed the importance of states in the absence of federal policy.

“Listen to states and accommodate state innovations,” he said, citing the reworking of the Minimum Offer Price Rule as a good example of how PJM recognized states’ needs.

Stockton focused on cybersecurity and encouraged PJM to remain vigilant for world events.

Drake urged PJM to stay engaged with policymakers in Washington, D.C.