Stakeholders, PJM Begin Discussion around Capacity Capability Calculation

Task Force Sets Out to Devise Best Method for Evaluating Capability of Certain Resources

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The Capacity Capability Senior Task Force kicked off its first meeting April 7 with educational presentations on a proposed method of calculating how much power resources such as wind, solar and energy storage may offer into the capacity market.

Effective Load Carrying Capability (ELCC) is an established process of evaluating the capability of resources that cannot run at their full output for 24 continuous hours. This includes resources whose capacity varies based on weather conditions, like wind or solar, and limited-duration resources, such as batteries or pumped hydro storage.

The task force was created by an issue charge introduced and endorsed at the March 26 meeting of the Markets & Reliability Committee.

The reason for the effort is twofold:

  • The Planning Committee has been discussing switching to an ELCC method to calculate the capability of wind and solar units in the capacity market.
  • Stakeholders have proposed – and PJM supports – switching to an ELCC method to calculate the capability of energy storage resources. The proposal was offered in place of a paper hearing the Federal Energy Regulatory Commission initiated regarding the capability of energy storage resources.

The subject stems in part from FERC’s ruling last fall largely accepting PJM’s compliance filing regarding FERC Order 841, which required regional grid operators to remove barriers to the participation in wholesale markets for electric storage resources, such as batteries.

PJM Requested More Time on Issue

PJM submitted a filing Feb. 27 requesting that FERC “hold in abeyance” until Jan. 29, 2021, a paper hearing to investigate whether PJM’s provisions for establishing the capability of energy storage resources in the capacity market are unjust and unreasonable. Currently, PJM employs a 10-hour rule, under which a resource’s capability is rated by the power output it can provide for 10 continuous hours.

FERC has not yet ruled on the request.

The problem statement associated with the issue charge explains that as PJM’s resource mix continues to evolve to include more renewables and emerging technologies including energy storage, so too must the way PJM evaluates the contributions of these resources toward resource adequacy.

Today, that capability is measured independent of changes to the overall resource mix and therefore wouldn’t change according to the amount of renewables and energy storage on the grid as a whole.

This is problematic, because there is reason to believe that an increasing amount of variable and limited-duration resources can affect the hourly “loss-of-load probability” risk profile.

Over time, PJM could be over- or under-valuing these resources’ contribution to resource adequacy.

The ELCC Process

Patricio Rocha Garrido, Senior Engineer – Resource Adequacy Planning, explained the ELCC process in detail.

ELCC, which dates to 1966, provides a way to assess the capacity value of a resource that is tied to the loss-of-load probability concept. In essence, it measures the additional load the system can supply using a particular generator with no net change in reliability.

Levitt provided an overview of how other regional transmission organizations employ the ELCC method. Also discussed were the implications of installed capacity (ICAP) and unforced capacity (UCAP)  as well as capacity interconnection rights (CIR) transfers.

Phase I of the task force will focus on solar, wind and energy storage resources. Phase II will cover all other limited-duration resources and intermittent resources.

The Phase I work is expected to last until the end of the year. Its conclusions would inform a filing with FERC by Jan. 29, 2021. Phase II is expected to take about 12 months and will begin following the conclusion of the first phase.