PJM saw a dramatic shift toward renewable energy projects in the 2020 interconnection queue, with more than two-thirds of interconnection requests in the Regional Transmission Expansion Plan (RTEP) process coming from solar and wind projects.
The RTO released its annual 2020 RTEP report on Thursday, highlighting last year’s transmission system enhancements and the future needs for its members. PJM said 43 new baseline projects were planned during 2020 at an estimated cost of $413 million, with 64% ($264 million) composed of transmission owner criteria violations, 22% driven by generator deactivations, and 14% by other NERC and PJM reliability criteria.
The $413 million of baseline transmission investment approved reflects the “shifting dynamics driving transmission expansion,” PJM said, as new large-scale transmission projects of 345 kV and above become more uncommon with the RTO’s annual load growth falling below 1%. A large proportion of the new investment occurring at 500 kV is to address aging transmission lines, many of which were constructed in the 1960s or before.
PJM reported that 55 new network transmission projects at an estimated cost of $101 million are required to ensure the reliable delivery of the generation currently seeking interconnection to the grid.
“Aging infrastructure, grid resilience, shifting generation mix and more localized reliability needs are now more frequently driving new system enhancements,” the report said.
The approved baseline projects included PJM’s first interregional market efficiency transmission project, the replacement of the 138-kV Michigan City-Trail Creek-Bosserman line with MISO. PJM’s Board of Managers approved the project at its December 2019 meeting, while MISO’s Board of Directors approved the project during its Sept. 17 meeting. (See MISO Board Primed for 1st Major Interregional Project.)
The nearly $22 million reconstruction of the line in Indiana’s northwestern corner was identified in the 2018/2019 MISO-PJM coordinated system plan, with PJM covering 90% of the costs. The 11-mile rebuild is located in MISO’s Northern Indiana Public Service Co. transmission zone and is expected to be in service by January 2023.
Changing Capacity Mix
PJM said its RTEP process continues to manage an “unprecedented capacity shift” resulting from federal and state policies encouraging more renewable resources and the addition of other fuel sources for economic reasons. The RTO said the shift is marked by new generating plants powered by shale natural gas in the region, new wind and solar projects made possible through federal and state renewable incentives, plant deactivations, and market impacts from demand response and energy efficiency programs.
The interconnection process is showing trends of a significant increase of renewable generation proposed in PJM. Of the approximately 105 GW of interconnection requests in 2020, PJM said nearly 59 GW, or 56%, of all requested interconnection rights resulted from solar generation projects, overtaking natural gas as the largest percentage of units.
The report noted that solar interconnection requests more than doubled by megawatt over 2019 with more than 1,300 active or under construction projects in the queue. Storage and wind generation types have also grown in the queue, constituting 10.4% and 6.3%, respectively.
Existing Reliability Pricing Model-eligible natural gas-fired generation plants totaling nearly 28 GW constitute 27% of the generation currently seeking capacity interconnection rights in the queue. Gas-fired capacity greatly exceeds the 76 MW of coal-fired resources in the queue.
More than 30.6 GW of coal-fired generation have been deactivated in PJM between 2011 and 2020, with approximately 2.5 GW of coal unit deactivations announced in 2020. PJM oversaw 29 generation units deactivated in 2020, totaling nearly 3.3 GW.
“The economic impacts of environmental public policy, coupled with the age of these plants — many more than 40 years old — make ongoing operation prohibitively expensive,” the report said.
PJM’s installed reserve margin (IRM) for the 2021/2022 delivery year declined from 15.1% to 14.7%, the report said, driven by “strong generation performance” and a reduction in generation forced outage rates, especially for natural gas-powered combined cycle units.
Grid of the Future
As the needs of the grid change, PJM said it is looking at a strategic plan over the next five years to focus on several key trends.
The RTO said the integration of the growing number of renewable energy resources, including offshore wind, requires new thinking for the achievement of decarbonization and other clean air mandates. Several PJM coastal states have set specific offshore wind generation goals, totaling more than 14 GW by 2035. (See Md., NC, Va. to Team up on Offshore Wind.)
The first offshore wind facility in PJM became operational in September: Virginia’s 12-MW pilot project, consisting of two 6-MW turbines. The drive for offshore wind is a significant part of the Virginia Clean Economy Act signed into law last April. (See Va. 1st Southern State with 100% Clean Energy Target.)
PJM said the growing number of distributed energy resources, including rooftop solar, is driven by customer preferences for green energy solutions, lower energy bills, and resilience from extreme weather and other external events. The RTO said state and federal policies, technological advancements and customer demand could result in the addition of millions of DERs on the grid.
“The lines between generation, transmission and distribution are thus becoming less distinct,” the report said. “The scope and means by which PJM affects operational control of generation and load will change.”
The aging infrastructure of the PJM grid, with 30% of it more than 50 years old, requires replacement with new assets that adopt new technologies to create more efficiencies and provide benefits such as withstanding extreme weather events and lowering the frequency and duration of power outages.
To facilitate working toward the grid of the future, PJM and New Jersey last year announced the implementation of the RTEP Process State Agreement Approach, developing public policy-driven transmission to fulfill offshore wind power objectives. The approach allows individual or groups of states to submit a transmission project for study by PJM, even if it does not qualify as a reliability or market efficiency initiative under the RTO’s tariff. (See PJM Dusts off ‘State Agreement’ Tx Approach.)
PJM said it has also started to integrate RTEP changes in generation, transmission and load forecasting processes with “innovative thinking and technologies.”
“PJM’s RTEP process continues to evolve, bringing into clearer focus the grid of the future, one driven by decarbonization, renewables, public policy, resource mix and new infrastructure technologies,” the report said.