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PJM’s proposed long-term regional transmission planning marks a brand new means ahead. How a lot it would ship continues to be unsure.
It might be a brand new calendar yr, however the US grid is going through lots of the identical challenges it did in 2023, together with prolonged interconnection queue delays, a lag in transmission buildout, and accelerating fossil retirements. On the identical time, it faces rising clear power commitments by states and personal actors, and rising load progress from economy-wide electrification and different new investments.
Nowhere is that this more true than in PJM, a regional transmission group that coordinates wholesale electrical energy markets in 13 states and the District of Columbia. Simply final yr, PJM applied interconnection queue reforms and permitted over $5 billion in new transmission initiatives to assist, amongst different wants, fossil retirements and cargo progress pushed by information middle growth. All of the whereas, states throughout PJM, from Maryland to Michigan, are strengthening their local weather insurance policies, heightening the necessity for enhancements to the PJM grid to assist the supply of extra clear power. PJM’s Useful resource Retirements, Replacements, and Dangers report, launched in February of 2023, highlights the reliability dangers surfaced by these important supply- and demand-side shifts.
One factor is for certain: proactive transmission planning shall be vital to deal with all of PJM’s overlapping grid challenges in a dependable and inexpensive method. At present, PJM’s transmission planning course of is overly myopic, leading to an overemphasis on lower-voltage grid upgrades that don’t ship the size of proactive transmission that we’d like for the power transition. On the identical time, mills are going through more and more excessive prices to interconnect due to an absence of high-voltage regional transmission, posing a barrier to well timed new entry.
As analysis from final yr illustrated (Exhibit 1), PJM’s funding in high-voltage transmission has been declining in recent times, particularly in contrast with different grid areas. We have to reverse this pattern to fulfill the a number of adjustments famous above that PJM’s grid is going through at the moment.
![](https://cleantechnica.com/wp-content/uploads/2024/02/PJM-transmission-miles.png)
Final summer time, PJM initiated a sequence of workshops to revamp its transmission planning course of, known as Lengthy-Time period Regional Transmission Planning (LTRTP). This has the potential to shift extra funding to the higher-voltage, longer-distance traces the area wants for the power transition. As proposed, LTRTP would improve PJM’s current transmission planning by modeling three eventualities on a way more complete foundation:
The Base Situation consists of all introduced and policy-driven generator retirements, forecasted new load, and sufficient new era to keep up the 1-in-10 reliability normal. PJM proposes to allocate Base Situation prices utilizing its regional reliability value allocation framework.
The Medium Situation consists of the Base Situation assumptions and provides new era to completely meet state coverage wants (e.g., renewable portfolio requirements or clear power requirements). PJM proposes allocating any extra prices for the Medium Situation, above these within the Base Situation, to states with coverage necessities utilizing PJM’s State Settlement Method.
The Excessive Situation consists of the identical coverage wants because the Medium Situation however assumes increased hundreds, incorporating extra bold electrification projections. PJM additionally proposes to allocate any increased prices within the Excessive Situation utilizing the State Settlement Method.
In comparison with the established order, PJM is taking an enormous step ahead with LTRTP. By combining a number of drivers of transmission wants, together with plant retirements, load progress, and new era, right into a scenario-based analysis, LTRTP can determine holistic transmission options that resolve these points, decrease prices for customers, and preserve system reliability. Importantly, PJM can be planning to calculate a number of advantages for transmission initiatives, modeled off of these enumerated within the FERC regional transmission Discover of Proposed Rulemaking. These embody manufacturing value financial savings, prevented era and transmission prices, and lowered lack of load. By factoring in these advantages, everybody concerned could make extra knowledgeable funding selections.
Nonetheless, PJM and its stakeholders can take a number of extra steps to enhance LTRTP. Particularly, we advocate the next:
States ought to proactively discover and agree upon a value allocation methodology for the Medium and Excessive Situations. Whereas the State Settlement Method lays out a framework for dialogue, states via the Group of PJM States Inc. ought to proactively come collectively to debate how precisely prices could possibly be divided. Pursuing a multi-State Settlement Method, for instance, may assist meet a number of states’ coverage targets extra effectively and cost-effectively. PJM’s proposed LTRTP advantages modeling might help inform these value allocation conversations. As a place to begin, PJM states can look to how different areas have structured long-term planning value allocation, together with MISO LRTP Tranches 1 and a pair of and ISO-NE’s new Lengthy-Time period Transmission Examine (LTTS).
PJM ought to embody market effectivity in its drivers of transmission wants. At present, PJM is planning to guage solely reliability drivers as a part of LTRTP whereas holding market effectivity (financial) drivers to shorter-horizon (5 years out) planning. This runs the chance of underbuilding the transmission that we’d like long run by ignoring alternatives to concurrently cut back congestion, and thus prices for customers. Transferring ahead, PJM ought to contemplate the best way to additionally incorporate consideration of market effectivity drivers into LTRTP, together with via sensitivity analyses. MISO’s LRTP is an effective instance of long-term, multi-driver planning.
PJM ought to embody a number of demand sensitivities in its Base Situation. PJM’s present LTRTP framing consists of only one load forecast for the Base Situation, with a excessive electrification future thought-about solely as a part of the Excessive Situation (which is contingent on states agreeing to pay for the upgrades). PJM ought to as an alternative incorporate a number of load forecasts into its Base Situation via sensitivity analyses. Current upward revisions to PJM’s annual load forecast reaffirm the necessity for analyzing a number of load progress futures impartial of state public coverage wants. On the outset of this yr, for instance, PJM launched its 2024 load forecast, which initiatives 7–2 % progress per yr over the following 10 years — roughly double that of the 2023 forecast’s annual progress charge of 0.8–1 %.
PJM ought to plan for increasing connections to its neighbors along side LTRTP. LTRTP is concentrated on regional transmission, however PJM must also be planning for extra interregional transmission. Current research have recognized the potential for big value financial savings — greater than $15 billion between MISO and PJM alone — that might consequence from PJM constructing extra interregional transmission to neighboring grid areas. Interregional transmission additionally helps enhanced reliability and resilience throughout excessive climate occasions. Together with LTRTP, PJM ought to be strengthening its interregional planning efforts with neighboring grid areas.
With these enhancements, we consider PJM can use LTRTP to plan a “least-regrets” transmission portfolio that serves as a basis for a dependable grid that meets the rising wants of its prospects. Transferring ahead, we hope to see PJM finalize the LTRTP course of within the coming months, in order that implementation of those wanted updates can start. On the identical time, with the pending FERC regional transmission rulemaking anticipated later this yr, PJM ought to be ready to completely adjust to the rulemaking in a means that enhances the present LTRTP framework. Exhibit 2 beneath illustrates the progress PJM’s LTRTP could make, as at the moment proposed, and the extra greatest practices that stay on the desk.
As quite a few research have proven, high-voltage regional transmission has the potential to decrease prices for customers, preserve grid reliability, and foster financial progress by connecting new hundreds and era. Moreover, many grid areas are already doing the kind of long-term, scenario-based planning that PJM is proposing via LTRTP and seeing outcomes (e.g., MISO’s LRTP, CAISO’s Transmission Financial Evaluation Methodology, ISO-NE’s LTTS, and NYISO’s Public Coverage Transmission Planning Course of).
To that finish, all of PJM stands to learn from a extra strong, long-term strategy to transmission planning, as all states in PJM are going through adjustments to their era and cargo. A scarcity of proactive transmission buildout places PJM states liable to elevated reliability points and lacking out on probably profitable financial growth related to new load progress. Transmission is a long-term funding that pays dividends, and stakeholders within the area ought to work to make sure 2024 is the yr PJM begins investing sufficiently and properly within the grid of the longer term.
By Claire Wayner, Katie Siegne, © 2023 Rocky Mountain Institute. Revealed with permission. Initially posted on RMI.
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