Despite the turn of the calendar, the American power grid is entrenched in persisting issues inherited from 2023, such as deferred interconnection queues and sluggish transmission infrastructure development. Simultaneously, state and private sector commitments to clean energy are mounting in conjunction with increased demand resulting from a more electrified economy.
The Challenges and Changes in PJM’s Jurisdiction
PJM’s territory spans 13 states plus the District of Columbia, all grappling with an outdated grid that’s buckling under the retirement of fossil fuel plants, burgeoning energy requirements of data centers, and vigorous climate policy advancements. Last year, PJM took action by reforming their interconnection queues and sanctioning new transmission projects worth billions, signaling awareness of their system’s shortcomings amid fast-paced changes highlighted in their report on Resource Retirements, Replacements, and Risks.
Proactive Planning as the Key to Grid Stability
Presently, PJM’s approach to transmission planning is short-sighted, overly fixated on immediate upgrades at the cost of neglecting the broadscale, long-term transmission solutions necessary for a smooth energy transition. This strategy also burdens generators with exorbitant interconnection costs due to insufficient high-voltage regional transmission, thereby impeding timely new energy integration.
Fostering Investment in High-Voltage Transmission
Statistics from last year’s research reveal a decline in PJM’s investment in high-voltage transmission, a trend that must be inverted to tackle the numerous complications PJM’s grid is currently facing.
PJM’s Long-Term Regional Transmission Planning (LTRTP) Initiative
In a welcome move, PJM Inc. has begun revamping its transmission planning by introducing LTRTP. This initiative proposes a transformative shift towards investing in the resilient, long-distance lines needed for the future by modeling three comprehensive scenarios.
Defining the Scenarios
- The Base Scenario encompasses forecasted new loads, plant retirements, and sufficient new generation to maintain grid reliability, with costs allocated using PJM’s regional reliability framework.
- The Medium Scenario builds upon Base Scenario assumptions by incorporating new generation to meet state policy mandates, with additional costs allocated to policy-driving states under PJM’s State Agreement Approach.
- The High Scenario includes the Medium Scenario’s policies while assuming higher elector demand, with costs again allocated through the State Agreement Approach.
LTRTP offers a more integrated evaluation of transmission by including diverse factors like new generation, plant retirements, and load growth in its analyses, which could streamline solutions and curb consumer costs while maintaining reliability. PJM aims to also measure multifaceted project benefits, such as production cost savings and reduced loss of load, to inform better investment decisions.
Proposed Enhancements for LTRTP
Despite the comprehensive nature of LTRTP, there’s room for improvement. For instance, PJM could benefit from a proactive stance among states regarding cost allocation for Medium and High Scenarios, incorporation of market efficiency into the drivers of transmission requirements, analysis of multiple demand sensitivities within its Base Scenario, and a push for more interregional connections.
Adopting these strategies could help PJM craft a ‘least-regrets’ transmission portfolio vital for a reliable, future-proof grid. With the expectant regional transmission rulemaking from FERC, compliance could drive PJM to enhance the existing LTRTP framework further.
Regional Transmission Planning: The Road Ahead for PJM
High-voltage regional transmission is integral for lowering energy costs, supporting grid reliability, and spurring economic growth by linking new generators and loads. Many regions have already embraced long-term, scenario-based planning, producing tangible results — a methodology that PJM is aspiring to emulate through LTRTP.
All regions under PJM’s purview can benefit immensely from a more in-depth, long-term planning strategy for transmission. Failure to proactively expand transmission can lead to reliability issues and lost economic opportunities linked to new generations of load. Given transmission infrastructure’s long-term payback, stakeholders in PJM’s territory must advocate for judicious investments in 2024, building the foundation for an adaptable and robust grid of tomorrow.
