PJM Interconnection’s annual Winter Operations report shows reliable operations through the mild winter period, defined as Dec. 1 through Feb. 29.
Last winter was remarkable for the lack of even brief periods of peak demand. Even mild winters are historically characterized by stints of freezing weather that spark brief, peak demand and correspondingly higher energy prices.
Measured against average winter cold from 1981 to 2010, the mild winter temperatures in the region served by PJM consistently ranged between 4 to 6 degrees higher – resulting in only one Cold Weather Alert, PJM reported at the April 16 Operating Committee meeting.
However, last winter’s remarkably even and elevated temperatures produced instead the lowest peak demands in recent years. As a result, locational marginal pricing fell overall compared even to the similarly warm winters of recent years.
Last winter’s real-time locational marginal prices (LMPs) averaged $21.31, compared to $26.16 and $29.33, respectively, during the mild winters of 2015–2016 and 2016–2017. This coincided with natural gas prices nearly $1.50 lower than 2018–2019 at hubs throughout PJM’s 13-state footprint from Chicago to Washington, D.C.
In contrast, more typical, recent winter energy price peaks are characterized by LMPs in the mid $40s, apart from the record LMP average of $72.50 during the 2013–2014 Polar Vortex.
As milder temperatures consistently prevailed, PJM recorded no natural gas pipeline conditions impacting winter operations and only 12 Emergency Procedures, compared to 43 during the 2013–2014 Polar Vortex season.
PJM’s resource mix mirrored prevailing trends, marked by the rising incidence of natural gas and renewables, a decline in coal, and a slight decline in nuclear. Generation resources in the PJM region saw an acceleration of the trend of improvement in forced outage rates of recent years. Forced outage rates this winter were measured at an average of 2.5 percent, compared to an average of 4.47 percent since the 2015–2016 season.