PJM officials are considering boosting the RTO’s installed reserve margin (IRM) for winter as a result of its experience in January, when it narrowly avoided shedding load amid frigid temperatures and high outage rates.
PJM’s Tom Falin told the Planning Committee last week that a winter IRM is among the responses officials are considering based on a loss-of-load analysis that highlighted the winter risks.
PJM’s current IRM requirement is based on its summer peak demand and the assumption that generator-forced outages occur randomly at a constant rate under all load and temperature conditions.
In early January, however, PJM saw outage rates three times the assumed 7.35%, with many generators unable to start or obtain fuel due to the cold.
As a result, PJM recently conducted a loss-of-load analysis for the winters of 2014/15 and beyond to determine the risk of the RTO having insufficient resources to meet load.
The analysis found that on a 90/10 peak day next winter (90th percentile of winter loads), there is a “virtual certainty” of load shedding if 18% of generation is lost to weather outages and maintenance in addition to the year-round 7.35% outage rate, Falin said.
The situation could be more dire in 2015/16 as a result of retirements resulting from the Environmental Protection Agency’s Mercury and Air Toxics rule. The analysis finds a 90% chance of load sheds on a 90/10 winter peak day with only 12.5% in additional outages.
Falin said the results indicate that only 7.4% of PJM’s generation can be “at risk” of winter-related outages to remain in compliance with the “one day in 10 years” loss-of-load expectation on which PJM’s IRM is based.
As a result, he said, PJM is considering proposing either a winter IRM or ensuring that no more than 7.4% of the resources clearing in the capacity market are at risk of cold-related outages.
James Wilson, a consultant to state consumer advocates, said the analysis was conservative and misleading because, among other assumptions, it ignored energy efficiency and assumed no demand response available in the winter.
Falin said the assumption was justified, noting only 43 MW of annual DR cleared for the upcoming winter.
Wilson noted that the threshold identified by PJM was based on preventing any non-zero increase in LOLE, which might lead to costly policies to limit at risk units. He suggested a threshold be applied, as PJM has done in other contexts.
Members OK Load Model for IRM
In related news, the Planning Committee last week approved a PJM staff recommendation to use an eight-year load model (2004-2011) for this year’s reserve requirement study.
Planners chose the model from among 36 candidates ranging in length from seven to 14 years. They said it did well in two coincident peak analyses and was a more recent time period than the other alternatives.
The load model will be used in resetting Installed Reserve Margins for 2015/16, 2016/17 and 2017/18, as well as establishing the initial IRM for 2018/19.
