PJM Presents Fuel Security Study

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A combination of public policies, lower fuel prices and technology improvements has altered the traditional mix of resources serving customers. As a result, the security of the fuel supply chain — one component of the resilience of the power grid — has become an increased area of focus.

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

President and CEO Andy Ott and Mike Bryson, vice president – Operations, announced the results at the National Press Club, Washington, D.C.

Ott said the findings underscore that PJM is reliable today. But the study peers into the future, to stress-test the system to reveal future vulnerabilities and make sure the system is resilient under many different conditions.

He said, “The grid is more reliable today than it’s ever been, but the question we’ve been asked is are we properly preparing for changes and major disruptions into the future, scenarios for which there are no standards?”

PJM undertook the study earlier this year to determine whether dependence on any one type of fuel delivery system in the generation of electricity would pose any long-term risks to the resilience of the grid. The study, which is the first of its kind in scope and scale, addresses that question.

The study was designed to test the grid’s limits to endure high-impact, long-term disruptions to generators’ fuel supplies. 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.

Until recent years, threats to resilience were mostly weather and transmission lines. Now, they include new dangers and conditions that come with new challenges: cyber and physical attacks, generation unit retirements and security of the fuel supply.

PJM looked five years out, analyzing more than 300 scenarios that various elements like extended periods of cold weather, customer demand, fuel availability, refueling frequency, generator-forced outage rates, generator retirements and replacements, the way generators are dispatched and pipeline disruptions.

PJM chose a 14-day period of cold weather for the analysis, which matches the longest period of extended cold we have seen over the last 45 years.

Bryson said that, although the system generally sees its highest customer demand in summer, the greatest strain on the fuel supply is in the winter. For the most part, that’s because residential and business heating competes with fuel delivery to gas-fired and dual-fuel generators, which make up over 30 percent of the energy produced in PJM.

Even in an extreme scenario, in an extended period of severe weather combined with high customer demand and fuel supply disruption, the PJM system would still remain reliable and fuel-secure – though PJM would start to see some reserve shortages.

“But the point in a stress test is to go way beyond your comfort zone, so we began layering in more and more extreme conditions,” he said.

“It’s important that whatever steps we put in place is cost-effective for consumers.”

The results indicate that ensuring generator fuel security should be considered by PJM and its members; also PJM and stakeholders should look for opportunities to address resilience through the competitive wholesale electricity markets.

“We believe strongly that the competitive wholesale electricity market is the best mechanism to encourage investment in the attributes and technologies needed to keep the grid secure and reliable at the lowest cost,” said Ott.

Also on Thursday morning, PJM gave a detailed presentation to stakeholders at a special session of the Markets and Reliability Committee meeting. Dave Souder, senior director – Operations Planning; Asanga Perera, manager – Advanced Analytics; and Suzanne Daugherty, senior vice president, chief financial officer and treasurer, reviewed the scenarios and laid out the path forward.