PJM Presents Fuel Security Study to Stakeholders

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Highlights

  •  PJM’s fuel security analysis is the next step in ensuring the resilience of the grid, focusing on one of its most important elements – fuel supply.
  • The PJM system is reliable today and will remain reliable into the future.
  • In the analysis, PJM stress-tested the fuel delivery systems serving generation in the PJM region under extreme scenarios to identify when the system begins to be impacted and to identify key drivers of reliability risk.
  • In order to enhance the fuel security of the grid into the future, PJM believes market-based mechanisms should be explored for retaining or procuring resources with the necessary attributes.

As part of PJM Interconnection’s ongoing initiative to assess the resilience of the electrical grid, PJM today released a summary of its study examining one critical element of grid resilience – fuel supply.

Suzanne Daugherty, senior vice president, chief financial officer and treasurer, Dave Souder, senior director – Operations Planning, and Asanga Perera, manager – Advanced Analytics, presented the summary to stakeholders Thursday morning at a special session of the Markets and Reliability Committee meeting.

Grid operators around the world find themselves contending with new challenges, including a rapidly changing fuel mix, extreme weather, cyberattacks and physical security threats. As aging, uneconomic generators are replaced by natural-gas-fired generation and renewables, security of the fuel supply – one component of the resilience of the power grid – has become an increased area of focus.

Method

PJM looked five years into the future, using a 2023/2024 system model, to analyze more than 300 different scenarios ranging from typical operations to extreme scenarios, considering elements like generation retirements, customer demand, fuel delivery and fuel disruptions.

The study was designed to test the grid’s limits to endure high-impact, long-term disruptions to generators’ fuel supply. The study also identified scenarios in which the system would face power outages by applying extreme, but reasonably plausible assumptions for weather, customer demand, generator retirements and fuel availability.

The analysis found that in a sustained period of cold weather with typical customer demand, PJM’s system can operate reliably over an extended period of stress.


The study identifies key variables to the security of the grid’s fuel supply. They include:

  • Availability of non-firm gas service
  • Ability of the fuel-oil delivery system to replenish oil supplies during an extended period of extreme cold weather
  • Physical breaks at key locations on the pipeline system
  • Customer demand (load)
  • Generator retirements, replacements and resulting installed reserve margin
  • Use of operating procedures to conserve fuel during peak winter conditions

For example, in a 14-day period of cold weather with typical winter load and generation retirements announced as of Oct. 1, 2018, PJM’s system would withstand an extended period of stress while remaining reliable. Even in an extreme scenario, such as an extended period of severe weather combined with high customer demand and a fuel supply disruption, the PJM system would still remain reliable.

As with any stress test, the analysis was intended to identify tipping points at which stressed conditions begin to impact the PJM system. By subjecting the system to a series of extreme, but plausible scenarios, PJM found stress points, starting in 2023, which could result in material levels of generation unavailability and load shedding.

PJM also urges national consideration of fuel security issues through the resilience docket opened by the FERC (Federal Energy Regulatory Commission), as the issues raised by PJM are not necessarily limited to the PJM region.

PJM will continue to work with the gas pipeline industry to improve coordination in communications, refine contingencies and further improve shared understanding of pipeline and grid operations, and where they interface.

As outlined in PJM’s FERC resilience filing. PJM will also collaborate with the fuel-oil and fuel-oil-transportation industries to increase transparency of on-site fuel inventory levels in addition to replenishment rates and capabilities.

Going Forward

While there is no imminent threat, fuel security is vital.  In mid-December, PJM will publish a white paper detailing the background, method/approach, analysis results, conclusions and next steps.

PJM will work with its stakeholders, starting this month, to examine these findings and explore market-based solutions to address concerns about the long-term security of the fuel supply. PJM will:

  • Host a follow-up Special Markets and Reliability conference call on Nov. 26 to address additional questions that may arise as stakeholders review the study results.
  • Host a Special Markets and Reliability meeting on Dec. 20 to discuss the additional detail provided in the paper.

PJM expects to have a problem statement presented to stakeholders in early 2019, with any potential market-rule changes targeted for filing with the FERC in early 2020.