On Dec. 30, PJM released its annual long-term forecast report.
The independent load forecast indicates a summer peak demand that is consistent with the prior year’s long-term load forecast, while the outlook for winter peak demand is higher. This year’s forecast incorporates updated data and a significantly revised forecast methodology.
Over the next 15 years, waxing trends in electricity demand are informed by many factors, ranging from industrial energy consumption to slight load reductions, concurrent with accumulating appliance energy efficiency and the expansion of distributed solar power. At the same time, the accelerating use of electric passenger vehicles will provide a small boost to load growth through 2035.
Slight Load Growth Forecast for Summer & Winter
The 2020 long-term load forecast accounts for more data about energy consumption by end-use sector, the growing impact of energy efficiency, the surge of behind-the-meter solar, the historical decline of industrial electricity use in the PJM region, and historical weather patterns dating back 25 years. Of the entire expected load, 37 percent is residential, 37 percent commercial and 26 percent industrial.
In all, summer and winter load growth for the PJM region are projected to grow at the same rate, or 0.6 percent annually, over the next decade. Over the long term, the forecast shaves the overall growth rate to 0.5 percent annually between 2020 and 2035.
|Summer (0.5% growth)
|Winter (0.6% growth)
Compared to the 2019 Load Report, the new forecast reflects a reduction in the summer peak of -1.9 percent (or -2,778 MW) in 2020. This downward summer trend tapers to -0.6 percent, or a reduction of 956 MW in the 2023 RPM auction year, and a reduction of -0.4 percent, or 673 MW in 2025, compared to the 2019 Load Report.
In contrast, winter load in 2020 is expected to rise 0.1 percent, or 139 MW, compared to the 2019 Load Report.
Across the entire PJM region, net energy for load growth is projected to average 0.7 percent annually over the next 10-year period. The total PJM energy is forecasted to be 839,830 GWh in 2030, a 10-year increase of 56,875 GWh.
Forecast Drivers: Energy Consumption Trends
To improve its overall accuracy, PJM has adjusted its methods for calculating the annual long-term load forecast. These improvements included looking more deeply into residential, commercial and industrial load trends.
Residential electricity consumption is expected to grow 0.6 percent from 2020 to 2035, down from a growth rate of 0.9 percent from 1998 to 2018.
Commercial total use is expected to grow by 0.6 percent annually, down from a 1 percent growth rate from 1998 to 2018.
Industrial total use is expected to expand by 0.4 percent annually from 2020 to 2035, up from a -0.5 percent between 1998 and 2018. That depressed rate is a result of lingering overall effects from the Great Recession. From 2009 to 2018, more positive movement is reflected in an average annual rate of 0.6 percent growth.
Electric Vehicles on the Rise
The new long-term load forecast methodology also accounted for, for the first time, data reflecting the actual volume of electric vehicles sold and their impact on the grid – from 200 MW in 2020, up to an estimated 1,500 MW in increased load by 2035.
In the forecast, each electric vehicle is expected to consume up to 4,500 kWh annually. New figures incorporated into the forecast include light duty (passenger) vehicles, excluding large trucks, transit and rail. PJM will continue to monitor the potential impact of freight and commercial electric vehicles and make further model enhancements if necessary.
By 2035, increasing electric vehicle adoption is expected to add less than 0.1 percentage points to the average annual growth rate.
Distributed Solar Generation & Appliance Energy Efficiency Shave Forecast
The new long-term forecast accounts for the growing impact of distributed solar generation, considering estimates of future installed solar capacity combined with weather patterns. Mounting energy efficiency in appliances is also considered.
Absent the impacts of new solar installations and improving appliance efficiency, the long-term load would have grown by an average of 1 percent annually, compared to the current forecast of 0.5 percent each year. Of that trim to the load growth rate, solar accounts for 0.2 percentage points, efficiency for 0.3 percentage points.
Planning & Partnership Help Assure Reliable Forecast
Effective planning requires resourceful and continuous refinement for the most accurate forecasts of need and lends insight into upcoming capacity auctions. Many factors informed the new long-term load forecast as it was assembled using an innovative and refined methodology, and data compiled in partnership between PJM and its members and stakeholders, to reflect insight for individual zones. In addition, a useful supplement to the 2020 PJM Load Forecast provides details about processes, data and the assumptions used. In response to an issue charge from the Planning Committee, the proposed model for the long-term forecast underwent intensive internal scrutiny in collaboration with stakeholders also sharing feedback about peak and energy estimates in their respective zones. As a result, PJM did not release a mid-year load forecast in 2019.