Regional grid operator PJM Interconnection, announced the next steps in its plans for fuel security for an area that serves 65 million people.
Fuel security is defined by PJM as risks to the fuel supply and delivery to critical generators.
The announcement came as members of the Trump Administration and some in the business community claim the nation could face a power catastrophe if nuclear and coal-fired power plants shut down in coming years.
Falling power prices have led to requests by nuclear power plant operators for subsidies. In the meantime, more solar and wind generation has gone online, with accompanying concerns about the need for backup power.
“The PJM grid remains reliable even with the resource retirements analyzed to date and investment in new, increasingly more efficient gas-powered generation sources. While the grid also remains fuel secure given these changes, the potential for continued evolution of the fuel mix underscores concerns, raised by PJM in a March 2017 report, about the need to examine the long-term resilience of the grid,” a release stated.
In the 2017 report, PJM’s Evolving Resource Mix and System Reliability, PJM concluded that the system could remain reliable with the addition of more natural gas and renewable resources, but that “heavy reliance on one resource type” raises potential risks.
PJM announce it will initiate a process, starting immediately, to analyze vulnerabilities and establish criteria to assess areas in the PJM system that could face future fuel security issues.
The criteria could then be incorporated into PJM’s existing market mechanisms to promote competition among different resource types to meet any fuel security needs in a particular location, with reforms to be in place for next year’s capacity auction, if necessary, the release stated.
“Competitive markets remain the best mechanism to maintain a reliable and fuel secure system at the lowest reasonable cost to customers,” PJM CEO Andrew L. Ott said. “We have the ability to identify risks to the system and to put a value on resources that offset that risk.”
The process will involve three phases:
- Identify system vulnerabilities and determine attributes such as on-site fuel requirements, dual-fuel capability or others that ensure that peak demands can be met during extreme situations.
- Model those vulnerabilities as constraints in PJM’s capacity market, similar to existing transmission constraints, allowing for proper valuation of needed attributes in the market.
- PJM will continue to work with the U.S. Department of Homeland Security, the U.S. Department of Energy, the Federal Energy Regulatory Commission, states, stakeholders and others to ensure that the results are consistent with identified security needs in the PJM footprint, including service to key military installations and other security concerns.
