The Energy Information Administration last week highlighted PJM’s response to the retirement of coal-fired generation in the ATSI zone in northern Ohio.
FirstEnergy’s retirement of 1,400 MW of generation in 2012, and planned closure of an additional 885 MW in 2015, will reduce generating capacity in the ATSI zone by 21%. But PJM was able to compensate with transmission, EIA noted in its Today in Energy feature, because of its 29% reserve margin.
“In a highly populated area that requires significant backup power in reserve, it may be more cost-effective to upgrade the transmission system” than build new generation, EIA said.
In May, the PJM Board of Managers approved more than two dozen transmission projects in ATSI to address the retirements, at a projected cost of about $1 billion. Replacing FE’s coal generation with 2,285 MW of new advanced combined cycle units would have cost almost $2.3 billion, according to EIA’s estimated overnight capital cost of $1,003/kw.
Capacity prices in the ATSI region, which cleared at about $350/MW-day in the 2015-16 auction conducted last year, fell to less than $100/MW-day in the 2016-17 auction, conducted after approval of the transmission upgrades.
The projects include the new Toronto-Harmon 345 kV line ($218 million) and the Mansfield-Northfield 345 kV line ($184.5 million).
