PJM Updates Pandemic Impacts to Current Load, Long-Term Forecast

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Estimated changes in daily peak load and daily energy use due to coronavirus-related impacts in the 13-state PJM region.

More than two months into the coronavirus-related restrictions shaping energy-use patterns, PJM updated stakeholders on the most recent observations of changing load and discussed the use of a revised long-term forecast for the upcoming capacity market Incremental Auction.

Since the debut of state-ordered shutdowns from late March through May 26, PJM’s weekday peak load declined 10.4 percent on average, or about 9,300 MW less than would be anticipated without the impact of the pandemic, PJM Senior Analyst for Resource Adequacy Planning Andrew Gledhill told stakeholders at the June 2 Planning Committee. During the same period, overall energy consumption declined about 8 percent across the PJM footprint.

The first half of May showed the most significant coronavirus-related impacts to date, with daily peaks down between 11 percent and 15 percent. According to updated data through June 3, the second half of May and through June 3 showed peaks closer to expected levels, with decreases ranging from under 1 percent to just over 10 percent.

Daily energy use, down from just under 10 percent to nearly 14 percent in the first half of May, was down between 6 percent and 11 percent between May 16 to June 3.

The recent decreased COVID-19 impact is likely due to some combination of increasing economic activity and/or greater residential energy use with higher temperatures.

“We might be seeing some increased weather sensitivity … which could put a dent in peak impacts,” Gledhill told the Planning Committee.

While commercial demand has decreased under the suspension of business activity, that pandemic-related downward impact on energy use may lessen with the onset of warmer weather and drive demand closer to typical levels. That’s because the summer heat can be expected to drive greater than usual daytime air conditioning usage as more people work from home.

PJM has been analyzing electricity demand by using traditional forecast models to “back-cast” expected loads, plugging in the actual temperatures, so that the models’ forecasts for weather are perfect. That works to isolate the estimated impact from the COVID-19 closures.

PJM traditionally observes roughly equal portions of commercial and residential load usage.

Short-term forecasts are critical to preparing for operation of the grid on any given day. But planning for future transmission and generation needs, PJM looks to longer-term forecasts, in which the pace of the economy is an important factor for electricity use.

To look ahead for the most accurate long-term load forecast, PJM has accounted for the dampened economic outlook and produced a revised long-term load forecast.

For example, April economic data from Moody’s Analytics indicates a 30 percent annualized drop in U.S. real gross domestic product during the second quarter. This new information renders outdated the long-term load forecast released last December, Gledhill said.

Compared to that December-issued long-term load forecast, PJM’s new estimates lower the 2020 peak outlook by 1.7 percent this year and 1.6 percent in 2021, before narrowing to a 0.6 percent gap by 2023.

PJM procures enough capacity to serve its load three years ahead of schedule. Between the original capacity auction and the delivery year, PJM conducts three incremental auctions to allow for replacement resource procurement, and increases and decreases in resource commitments due to adjustments to the reliability requirement. The reliability requirement is the minimum level of capacity plus reserves set by PJM to reliably serve the expected demand.

PJM is seeking a one-time waiver from FERC to utilize the revised long-term load forecast in the upcoming July 6 Second Incremental Auction serving the 2021/2022 Delivery Year. To allow time for comment and preparation for that auction, FERC approval of this new outlook is requested by June 15. Next, PJM will discuss the incorporation of new techniques utilizing updated weather and economic data in its forecast models at the next Load Analysis Subcommittee meeting.