The PJM grid came through the 2018-2019 winter reliably in the face of extreme temperatures and high electricity demand, confirming that the grid is strong, diverse, and dependable.
Electricity was supplied throughout this winter by a diverse set of resources, including natural gas, coal, nuclear and renewables. We also gained a number of important insights into grid operations, market trends and fuel security. So, what did we learn?
Generator Performance Continues to Improve
During the short but intense cold spell PJM faced between Jan. 28-31, forced outages were slightly higher than normal winter operations, which is typical for extreme cold periods. Overall, generator performance was good and continued to show market improvement over the 2013-2014 polar vortex. The fuel mix this winter was relatively similar to the 2018 cold snap, with the percentage of natural gas-fired generation increasing and the percentage of coal-fired generation decreasing.
The increased contribution from natural gas reflects lower gas prices in 2019 compared to 2018. The decrease in coal’s share can be partly attributed to the retirement of about 3,300 MW of coal units between January 2018 and February 2019.
Gas-fired generators show improvement this winter over last year. For example, during the peak demand of Jan. 31, gas supply outages were 2,930 megawatts compared to 5,913 MW during the 2018 cold snap. All fuel-supply related outages also fell by more than 50 percent. This improvement was driven by generators “firming up” their gas supply contracts, pipeline expansions, better gas-electric coordination and the relatively short duration of the cold weather.
Additionally, a major break in a natural gas pipeline in Ohio occurred during winter peak operations but did not pose a significant impact to generation. The pipeline operator was able to quickly isolate the damaged segment and gas supply to nearby PJM generation was not interrupted by the event.
Wind Generation Hits a New Peak
Wind generation hit a record output on Jan. 9, reaching 7,808 MW. Wind’s contribution to the overall energy mix was also significantly above its capacity commitment.
Reserve Pricing Reforms Needed
The price of procuring reserves does not always reflect their value, which is a continuing problem in the PJM markets. Synchronized reserves can provide power to the grid within 10 minutes, or quickly remove electricity demand, and are crucial to reliability.
On Jan. 31, Synchronized Reserve Market prices in PJM were at or near zero for 19 of 24 hours, suggest that those reserves have little or no value.
PJM plans to file a proposal with the Federal Energy Regulatory Commission soon to improve how reserve prices are formulated.
We’ll continue to analyze the dependability of the fuel-supply system to make sure we’re reliable under extreme conditions and craft appropriate market reforms to offer the right incentives to generators that provide critical reserves.