PJM CEO Asthana Opens 2022 Annual Meeting

Stakeholder Collaboration Critical To Remaining Reliable Among Generation Retirements, Load Growth, Decarbonization Policies

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PJM President and CEO Manu Asthana stressed the importance of stakeholder collaboration to prepare for changes in the energy industry in his keynote address Monday at the 2022 PJM Annual Meeting of Members, being held in Cambridge, Maryland.

“It’s been a remarkable three years” since arriving at PJM in 2019, Asthana said, noting a variety of challenges, including COVID, the energy transition, the war in Europe, supply chain issues and cyber threats.

He spoke at the opening of the Markets & Reliability Committee meeting.

PJM President and CEO Manu Asthana

Asthana said he was very proud of the amount and variety of topics stakeholders have tackled in the past year and continue to work through.

“I said when I joined the company that I was very committed to working through issues in the stakeholder process,” Asthana said.

“I still firmly believe that the way to solve the really complex problems of the energy transition is together as a stakeholder body. Not because it’s the quickest way to get there … but because it’s the best way to get to a resilient, durable and lasting set of solutions.”

“It’s been an incredible body of work,” Asthana said, noting progress on the Minimum Offer Price Rule (MOPR); interconnection process reform; long-term transmission planning in concert with the Federal Energy Regulatory Commission NOPR; PJM’s coordination with New Jersey using the State Agreement Approach to further that state’s offshore wind goals; implementation of Effective Load Carrying Capability; risk methodology; and ongoing work by the Resource Adequacy Senior Task Force.

What Will 2030 Look Like?

Context of this work is important, he said, which is why he asked his team to look out to 2030 – a year far enough in the future that you don’t think about it every day, and there is time to effect change, but it is close enough to develop a useful forecast.

Where might we be headed – viewed in context of the framework of PJM’s corporate strategy – to facilitate decarbonization policies reliably and cost-effectively, help build the grid of the future and foster innovation?

PJM can say with confidence that it has adequate reserves today, but the emerging longer-term picture is concerning, Asthana said.

“On the generation side, we currently see up to 40 GW of retirements, maybe a little bit more. A majority are driven by policy, not exclusively economics,” he said.

On the other side of the balance sheet, he said, PJM has 10 GW, maybe 15, of load that could come in from data center growth, and perhaps even further load growth from electrification.

What’s helping, he said, is that there is a large interconnection queue – more than 250 GW of new capacity applying to interconnect with PJM. However, this generation isn’t currently getting built at the pace we had anticipated.

Approved Generation Undeveloped

Asthana said there are about 30 GW with a signed interconnection service agreement – meaning they have passed through PJM’s study process – but only roughly 1,500 MW have come online this year.

“We have this massive queue, of which a meaningful portion has been approved for development, that isn’t getting built at the pace we had anticipated,” he said, citing supply chain challenges and other issues that are impacting the industry.

Today we are in good shape, he said, but “we cannot take the reliability that we enjoy in our region for granted through this energy transition; we have to take concrete steps to ensure that it will continue.” “We have time, but we don’t have time to waste, he said. “We need to take action to ensure we retain an adequate supply of dispatchable generation through the transition.”