The nation’s largest power grid can withstand extended periods of stressed conditions and remain reliable, according to an industry study examining the resiliency of the system providing electricity to 65 million people.
The analysis by PJM Interconnection, the owner of the grid, was spurred by reliability questions that have resulted because of a shift in the mix of power suppliers and technology types. It focused on a single component of grid reliability — fuel security.
While the study found the grid is reliable and saw no immediate risks forthcoming over the next five years, it identified extreme scenarios where the system could face power outages under plausible assumptions for unusually frigid winter weather, spikes in customer demand, plant retirements, and limited fuel availability.
The release of the year-long study comes at a time when the issue of reliability is hotly debated at the national and state levels, including in New Jersey where regulators are studying whether nuclear power plants here deserve significant ratepayers’ subsidies to avert their early closing.
“The findings underscore that PJM is reliable today,’’ said Andrew Ott, president and CEO of PJM, who called the grid more reliable than it has ever been. “But in this study, we are also looking into the future to stress-test our system to reveal future vulnerabilities and make sure we are resilient under many different conditions.’’
Higher prices for consumers?
The study will lead to new discussions among industry, states, PJM and others over what steps need to be taken to address those longer-term risks. One likely outcome, Ott said, is by valuing resources that have secure fuel supplies. That could lead to higher prices for consumers by paying power generators to have higher fuel inventories and contracts for fuel delivery during shortages.
“Whatever we do has to be cost-effective for the stakeholders,’’ Ott said during a press briefing Thursday at the National Press Club in Washington D.C. Government intervention is unnecessary, he added, saying some sort of market-based solution is the best approach.
The issue is also being debated at the Federal Energy Regulatory Commission and by the Trump administration where proposals to intervene in the markets to bolster nuclear and coal plants and avert their premature retirement have been floated. Those proposals include subsidies from consumers.
The findings of the analysis could bolster arguments of those who oppose government intervention in what advocates say is a competitive market, although that, too, is under dispute.
Clean energy advocates, meanwhile, still worry efforts to prop up conventional power plants could undermine the transition to renewable energy, like solar and wind power.
“I think this study will inform the FERC resiliency issue,’’ Ott said, describing PJM as fuel neutral. “Nothing in our report would say there is a specific need for a specific fuel source.’’
PJM found the system reached stress points under a series of extreme scenarios, increasing the importance of fuel supply and where supplies are disrupted.
“We believe that some changes in the system in the future — both market-based and operational — are warranted,’’ said Michael Bryson, vice president of operations for PJM.