Innovation driven by the competitive wholesale electricity markets has helped Pennsylvania become a regional economic force as both an energy exporter and a state where both prices and emissions have fallen significantly over the last decade, PJM President and CEO Andy Ott said Friday.
Ott was the keynote speaker for The Chamber of Commerce for Greater Philadelphia’s “Energy Evolution” event Friday morning at the Science History Institute in Philadelphia.
Pennsylvania’s “very dramatic transition” to generation that is increasingly dominated by cheap and abundant natural gas from the state’s shale fields has resulted in the commonwealth exporting 27 percent of its energy, Ott noted.
At the same time, the state has enjoyed lower wholesale prices than the rest of the PJM region — which itself saw a 40 percent drop in wholesale power prices between 2008 and 2017. PJM’s service footprint covers all or parts of 13 states and the District of Columbia.
“We have a stronger grid than we had 10 years ago,” Ott said. “Not only are we getting better, we’re getting greener at a flat or reduced cost,” Ott said.
The transition from coal-dominated generation to natural gas and renewables has resulted in a 30 percent drop in carbon emissions over the last decade, Ott said. Integral to that is the growth of energy efficiency programs and demand response programs, which compensate customers for agreeing to curtail their energy use. PJM has the largest demand response market in the United States.
“Pricing carbon attributes into the market is something we need to look at,” Ott said, if PJM’s states want to further reduce or eliminate the carbon footprint.
Other innovations include the penetration of battery storage in the frequency regulation market, which helps PJM to handle fluctuations in the transmission system. Battery storage now makes up one-third of the regulation market, Ott said.
Pennsylvania is at the center of the discussion — how do we evolve the grid in “not only an economical way but also in a reliable way,” Ott said.
The competition and innovation driven by the competitive wholesale power markets has resulted in investment and improvements to the system without increasing wholesale costs, he noted. Pennsylvania has seen more than $8 billion in investment in gas-fired generation in recent years, PJM has previously reported.
A prime example is in South Philadelphia at the Navy Yard, where PJM is a collaborative partner in development of microgrid that has its own onsite generation, storage and distribution. That means even if the rest of the PJM system has an issue, the microgrid can keep the Navy Yard running. The microgrid can also play an important role in restarting the grid following a catastrophic event, and will serve as test case for grid modernization.
Pictured above: Ott with Stacy Brittnee Robinson of the Philadelphia chapter of the American Association of Blacks in Energy.