UPDATE: Stakeholders Hear PJM Fuel Security Study

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This is an updated version of a story which ran in Inside Lines the morning of Nov. 1.

 PJM’s fuel security analysis is the next step in ensuring the resilience of the grid, focusing on one of its most important elements – fuel supply.

  • The PJM system is reliable today and will remain reliable into the future considering announced generation retirements under both typical and extreme weather conditions.
  • In the analysis, PJM stress-tested the fuel delivery systems serving generation in the PJM footprint under extreme, but plausible scenarios to identify when the system begins to be impacted and to identify key drivers of reliability risk.
  • In order to enhance the fuel security of the grid into the future, PJM believes market-based mechanisms should be explored to proactively value fuel security attributes.

As part of PJM’s ongoing initiative to assess the resilience of the electrical grid, PJM today released a summary of its study examining one critical element of grid resilience – fuel supply. In mid-December, PJM will publish a paper detailing the background, method/approach, analysis results, conclusions and next steps.

Suzanne Daugherty, senior vice president, chief financial officer and treasurer; Dave Souder, senior director – Operations Planning; and Asanga Perera, manager – Advanced Analytics, presented the summary to stakeholders Thursday morning at a special session of the Markets and Reliability Committee meeting.

The study was designed to test the limits of the grid’s ability to endure extended disruptions to generators’ fuel supplies. The study also identified scenarios in which the system would face power outages by applying extreme, but reasonably plausible assumptions for weather, customer demand, generator retirements and fuel availability.

PJM looked five years into the future, using a 2023/2024 system model, to analyze more than 300 different scenarios ranging from typical operations to extreme scenarios, considering elements such as generation retirements, customer demand, fuel delivery and fuel disruptions.

The analysis found that in a sustained period of cold weather with typical customer demand, PJM’s system can operate reliably over an extended period of stress. Souder pointed out that PJM concentrated on on-site fuel.

For example, in a 14-day period of cold weather with typical winter load and generation retirements announced as of Oct. 1, 2018, PJM’s system would withstand an extended period of stress while remaining reliable. Even in an extreme scenario, such as an extended period of severe weather combined with high customer demand and a fuel supply disruption, the PJM system would still remain reliable.

“It’s important to recognize that even under a the typical load scenario with escalated retirement lowering reserves down to the Installed Reserve Margin requirement of 15.8 percent, we are not shedding load,” said Perera. “Only in the escalated retirement, extreme-load scenarios, are we seeing load shed.”

The study identified key variables to the security of the grid’s fuel supply. They include:

  • Availability of non-firm gas service
  • Ability of the fuel-oil delivery system to replenish oil supplies during an extended period of extreme cold weather
  • Physical breaks at key locations on the pipeline system
  • Customer demand (load)
  • Generator retirements, replacements and resulting installed reserve margin
  • Use of operating procedures to conserve fuel during peak winter conditions
Souder

“That was based on 45 years of historic loads,” said Souder. “This chart (page 8) gives you an idea of that. The 50/50 load is something we reach every other year. The extreme is what we would hit once out of every 20 years; we studied a peak of 147,721 megawatts.

“For the extreme load scenario, the key is not every day hits 147,721 megawatts. However, at least one peak on five of the 14 days analyzed exceeded 140,000 megawatts, which is significant. We did focus on the winter because that’s when we see the gas and the oil delivery system stressed, competing with heating customers for the same fuel supply. That’s the reason for focusing on the winter timeframe.”

 Perera detailed the assumptions with retirements, from the simplest to most extreme scenarios. The stressed scenarios resulted in a loss of load under extreme, but plausible conditions.

Perera

By design, PJM created stressed scenarios that were intended to discover the point(s) at which an assumption or combination of assumptions begin to impact the system’s ability to reliably serve customers.

“The point of the study was to stress the system to test the breaking points,” said Perera.

In the stressed scenarios, assumptions that are contributing factors to the level of load shed include combinations of:

  • Level of retirements and replacements
  • Level of non-firm gas availability
  • Ability to replenish oil supplies
  • Location, magnitude and duration of pipeline disruption
  • Pipeline configuration

For example, Perera reviewed situations where the oil inventory was extremely stressed and scenarios with escalated retirements, some with replacement megawatts, some without, breaking them out into PJM regions. He concentrated on the most impactful of the scenarios under each circumstance.

“We really get to understand what type of benefits we get from each sensitivity,” he said. For example, he said, PJM can limit the level of emergency procedures, once it implements the Maximum Emergency Operating procedures.

In answer to a stakeholder question, Daugherty did warn against the possibility of misinterpretation of the results.

“The facts of what we did are out there,” she said. “We do recognize that different pieces could be taken out of context if [people] choose to do so.”

Going Forward

PJM also urges national consideration of fuel security issues through the resilience docket opened by the FERC (Federal Energy Regulatory Commission), as the issues raised by PJM are not necessarily limited to the PJM region. 

 

PJM will continue to work with the gas pipeline industry to improve coordination in communications, refine contingencies and further improve shared understanding of pipeline and grid operations, and where they interface.

 

PJM will work with its stakeholders, starting this month, to examine these findings and explore market-based solutions to address concerns about the long-term security of the fuel supply. PJM will:

  • Host a follow-up Special Markets & Reliability conference call on Nov. 26 to address additional questions that may arise as stakeholders review the study results.
  • Host a Special Markets & Reliability meeting on Dec. 20 to discuss the additional detail provided in the paper.

PJM expects to present a problem statement to stakeholders in early 2019, with any potential market or tariff reforms targeted for filing with the FERC in early 2020. Stakeholders should send fuel-security-related questions to: natalie.tacka@pjm.com.