The PJM Interconnection system can remain reliable with the addition of more natural gas and renewable resources, an analysis released Thursday by PJM concludes. However, the report notes that an increased reliance on any one generation type brings resilience risks not accounted for under traditional reliability standards.

The report, "PJM's Evolving Resource Mix and System Reliability," responded to questions about the effects of fuel diversity on reliability. PJM stakeholders had questioned whether the system is losing too many traditional resources as coal plants retire and nuclear owners consider their future.

"This analysis underscores our responsibility to continue to operate the system reliably, and explore the role of resilience, the ability to tolerate unforeseen shocks and continue to deliver electricity," said PJM CEO Andy Ott. "Different resources provide different reliability attributes, though new technology or regulations have the ability to improve those capabilities.  "PJM needs to work with stakeholders and the industry to determine whether markets and operation structures need to shift to make sure that necessary levels of generator reliability characteristics are maintained in future resource mixes."

The report analyzed the availability of generator reliability attributes essential to the grid under potential resource portfolios. Those qualities include frequency response, voltage control, ramp, fuel assurance, flexibility, black start, environmental restrictions and equivalent availability.

"We found that the risk to the system wasn't that resources couldn't necessarily provide reliability attributes but that the potential concentration of a single fuel source or low-probability, high-impact events could cause significant impacts to the system," said Michael Bryson, vice president – Operations, who led the study.

PJM created a "composite reliability index" to assess the operational reliability of various resources across four states: normal peak conditions, light load, extremely hot weather and extremely cold weather.

"The study concluded that our current portfolio is both reliable and diverse," Bryson said.

The study found that a more diverse fuel portfolio isn't necessarily more reliable. Certain resource blends that fall between the least and most diverse offer the greatest number of key generator reliability attributes.

An adequate level of diversity fosters flexibility and adaptability in mitigating risks associated with equipment failure, fuel price volatility, supply disruptions, extreme weather and other unforeseen system shocks.

PJM's current resource profile includes natural gas, coal, nuclear, renewables, demand response and other generation types.

The resource mix within PJM has become more evenly balanced over time.

In 2005, coal and nuclear resources generated 91 percent of the electricity on the PJM system.

Over time, policy initiatives, technology improvements, and economics spurred a shift from coal to natural gas and renewable generation.

From 2010 to 2016 in PJM, coal-fired units made up 79 percent of the megawatts retired, and natural gas and renewables made up 87 percent of new megawatts placed in service.

 PJM’s installed capacity in 2016 consisted of 33 percent coal, 33 percent natural gas, 18 percent nuclear, and 6 percent renewables (including hydro).

The analysis identified no limit to the amount of natural gas-fired generation that could be added to the system before it affected reliability; however, highlighted the potential increased dependency on fuel infrastructure and the need for PJM to further explore grid resilience.

The report did not address the economics of resource types, factors that might impact a fuel's deliverability or public policy issues such as environmental impact, including the use of subsidies.

A copy of the report is available online.

The topic will be the focus of the upcoming Grid 20/20: Focus on Resilience (Fuel Mix Diversity & Security), to be held April 19 in Philadelphia.

PJM manages the electric power system serving 65 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

NewsClips:

PJM Says More Natural Gas Power Generation Won’t Hurt Reliability

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PJM: Growth Of Natural Gas No Threat To Power Grid’s Reliability

Report: Regional Power Grid Can Handle Much More Gas, Renewables

Electric Grid Operator Questions Reliability In Shift To Gas-Powered Generation

As Coal, Nuclear Plants Shutter, PJM Eyes Energy Grid’s Future

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[Posted: March 30, 2017]

4/3/2017