PJM Study Weighs Effects of Policies on the Future Grid

Latest Review of Energy Transition Identifies Challenges of Evolving Energy, Environmental Landscape

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The fourth phase of PJM’s ongoing initiative to assess the impacts of integrating increasing numbers of renewable resources explores the longer-term challenges that might arise if current state and federal energy policies are fully implemented or accelerated.

The study addresses the complexity of the energy transition and the need for flexibility in generation resources and coordination of interregional interchange as increasing levels of intermittent resources create significant variability in generation output.

Energy Transition in PJM: Flexibility for the Future (PDF) continues PJM’s commitment to understand and prepare for a range of possible scenarios as the electric grid moves from a system based primarily on thermal, dispatchable generation to one with more renewable generation and storage.

The study uses three scenarios, with assumptions that have been updated to reflect the evolving system outlook through 2035, including retirements as well as renewable penetration in neighboring regions and how they impact regional interchange.

The three scenarios outlined below reflect emerging energy and environmental policies:

  • Base –Carbon-free generation serves 40% of annual energy, consistent with the 40% used in the second phase (PDF) of PJM’s Energy Transition studies. This provides a benchmark for today’s system.
  • Policy –Carbon-free generation serves 54% of annual energy, up from 50% in the second study. This reflects existing state and federal policies expected to come to fruition by 2035. Retirements in the Policy scenario align closely with those included in the third phase of PJM’s study on Resource Retirements, Replacements & Risks (PDF).
  • Accelerated –Carbon-free generation serves 93% of annual energy, up from 70% in the second study. This scenario aims to simulate a more stressed view of the system, with generation expansion and retirement beyond existing policies.

The study found that:

  • Accelerating the pace of new entry is critical to maintain reliability. Less than doubling the amount of resource retirements in the scenarios results in a quadrupling of the amount of new entry needed to maintain the same level of resource adequacy.
  • Interregional transfer capability is increasingly important. The need for enhanced coordination is aligned with current efforts underway between PJM and MISO.
  • Multiday, dispatchable resources are needed. Increasing levels of intermittent resources create significant variability and uncertainty to be managed by flexible resources.

Moving forward, PJM must evolve to address the complexity of the energy transition as increasing levels of intermittent resources create significant variability and uncertainty. This includes a focus on:

  • Continuing to track mismatches among resource retirements, load growth, pace of new generation entry and transmission build-out
  • Enhancing interregional coordination
  • Evaluating evolving system needs for essential reliability services and developing mechanisms to require and incentivize them

Visit Ensuring a Reliable Energy Transition for more information about PJM’s strategic focus on helping to facilitate state and federal decarbonization policies reliably and cost-effectively across 13 states and the District of Columbia.