The operator of the nation’s largest electrical grid on April 30 reiterated its system will remain reliable even with the retirements of substantial generation resources. But PJM Interconnection, whose system covers customers in 13 states, said it will conduct a review of its operations over the next several months “to understand the fuel-supply risks in an environment trending towards greater reliance on natural gas.”
PJM wants to know whether its network could still operate reliably in the event of outages from natural disasters such as extreme weather, a cyberattack, or pipeline issues that would curtail the flow of natural gas on its system. The regional transmission organization (RTO) in March 2017 issued a report—”PJM’s Evolving Resource Mix and System Reliability”—that said its system could add more natural gas and renewable power generation and remain reliable, but “heavy reliance on one resource type” could bring risks to grid resiliency.
PJM recently said more than 3,600 MW of generation capacity will retire in its service territory in 2018. In addition, Ohio power company FirstEnergy in March said its competitive arm would close four uneconomic nuclear units in PJM with generation capacity of 4 GW by year-end 2021. The company’s coal and nuclear generation divisions also recently filed for Chapter 11 bankruptcy protection.
FirstEnergy’s power plant subsidiary, FirstEnergy Solutions (FES), in late March asked Department of Energy (DOE) Secretary Rick Perry to “find that an emergency condition exists” in PJM. It is asking for financial compensation for coal and nuclear plants in the RTO.
PJM on Monday said it had completed an analysis of the FirstEnergy closures and found they would not impact grid reliability. It also said it would immediately begin a process to “analyze fuel security vulnerabilities and establish criteria to assess areas in the PJM system that could face future fuel security issues. The criteria will be the means to value and price fuel security. Those 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.”
“Competitive markets remain the best mechanism to maintain a reliable and fuel secure system at the lowest reasonable cost to customers,” PJM President and CEO Andrew L. Ott said in a news release. “We have the ability to identify risks to the system and to put a value on resources that offset that risk.”
The RTO said the process will include 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 scenarios.
- 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 identified security concerns.
Ott in a conference call Monday said PJM’s grid is “fuel secure” but wants to ensure it will remain so if more natural gas generation is added. “Are we going to find ourselves in a situation where we are over-dependent on one type of fuel delivery infrastructure,” Ott said. “If a pipeline would be compromised, does a (power plant) have sufficient backup, or (have) multiple ways to get fuel?”
Ott also said the review will look at fuel security for natural gas plants, and whether those plants could generate power using other sources such as kerosene, diesel, or liquefied natural gas, all fuels that could be stored on-site. “How long can the unit continue to operate with its on-site fuel? Is it a day? Is it two days? Is it three days?” Ott asked. “Say the recent bomb cyclone had lasted more than five days. What if we’d have been cold for three weeks? Would we have had enough of these types of fuels? We’re not sure. We’re going to study that.”
The bomb cyclone Ott referred to was a major winter storm in early March that brought bitter cold and blizzard conditions to much of the Northeast. Reports said more than 2 million people were without power during the storm, mostly in New York, Pennsylvania, Maryland, Massachusetts, and Virginia. A similar event hit the Northeast in early January.
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine)