PJM Publishes Second Phase of Ongoing Energy Transition Study

Paper Identifies Five Focus Areas Key to Planning a Reliable Future Grid

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PJM has released the second phase of its ongoing study to explore potential system impacts of the evolving resource mix, including the accelerating integration of renewables.

Energy Transition in PJM: Emerging Characteristics of a Decarbonizing Grid (PDF) is driven by the pillars of PJM’s corporate strategy – facilitating decarbonization reliably and cost-effectively, planning for the grid of the future, and fostering innovation. It builds on a paper released last year, Energy Transition in PJM: Frameworks for Analysis (PDF).

It is another tangible step toward identifying opportunities in the current market construct and offers insights into the future of market design, transmission planning and system operations.

The results suggest five key focus areas for PJM and its stakeholders and informs subsequent phases of the study:

  • Electrification shifts the seasonal resource adequacy risk to winter.
  • Retail rate design and energy storage become increasingly important with electrification.
  • Market reforms are needed to incent flexibility and mitigate uncertainty.
  • The integration of renewable resources increases the need for balancing resources to meet forecasted ramping requirements.
  • Energy storage (defined as four hours) enhances operational flexibility, but seasonal capacity and energy constraints require transmission expansion, long-term storage and other emerging technology.

In conducting the study (PDF), PJM synthesized the diverse polices of the area it serves in 13 states and Washington, D.C., into three scenarios in which an increasing amount of annual energy is generated by renewables.

The assumptions embedded in the scenarios were used to analyze the impact of four major sensitivities:

  • Electrification (electric vehicles and heating)
  • Energy storage
  • Interregional interchange
  • The inclusion of a downward-sloping Operating Reserve Demand Curve (ORDC) in the energy and ancillary services markets

A year of the Energy Market was simulated with an hourly resolution, and the capacity contributions of renewable resources were evaluated using the Effective Load Carrying Capability (ELCC) methodology.

The next phase of the study will consider additional sensitivities, including accelerated generation retirement of coal and gas, federal and state policies, and renewable integration in the Eastern Interconnection. It will also explore market design and transmission expansion.