The PJM electricity market faces a capacity shortfall, due to rising demand and a slow and inefficient interconnection process. As millions of people across the region face rate hikes due to this capacity shortfall, the states that are part of the PJM market are seeking new ways to take action to help keep power affordable and reliable.
In the face of these challenges, some stakeholders are seeking to attract more natural gas power plants to PJM states. However, natural gas power plants are not the solution to this crunch. (One reason for this is the gas turbine supply chain, which is currently stretched to a breaking point: Gas turbines are being ordered up to eight years in advance due to record demand.) State lawmakers and regulators need to expand capacity quickly, and they need to tap non-gas solutions to do so.
Advanced Energy United has released a new resource that summarizes the potential benefits of deploying three market-ready, non-gas tools to expand capacity in PJM states. All of these solutions have been tested and proven. Now, they must be prioritized by state policymakers and utility regulators.
The first tool discussed in the deck is load flexibility and virtual power plants (VPPs). These are programs and incentives that reward customers – including data centers and residential customers – for reducing usage or shifting power consumption to optimal times of day. This tool helps reduce stress on the grid during key hours when demand for power tends to spike.
Load flexibility and VPPs can be less expensive – and faster – than building a new power plant just to serve demand spikes. VPPs can also reduce stress on the distribution system, helping delay the need for spending on the poles and wires that keep the lights on. A recent study finds that greater load flexibility among new large customers seeking to interconnect in PJM would enable 17.8 GW of demand to come online in the region – without the need for new generation.
The second tool is interconnection fast-tracks – encouraging the development of new solar, wind and storage projects that are located near existing or retiring power plants. By taking advantage of existing interconnection points, new resources can skip the long interconnection process that is slowing down other projects in PJM. Analysts estimate that surplus interconnection service could enable 13.2 GW of new large-scale resources to come online in PJM by 2030; generator replacement could enable up to 10.2 GW of large-scale resources by 2030.
The third tool is advanced transmission technologies: Software and hardware upgrades that can significantly boost the existing transmission grid so power can move from where it is generated to where it is needed quickly, at higher volumes. From dynamic line ratings to advanced reconductoring, these technologies can dramatically increase the capacity of existing transmission infrastructure at a low cost, saving money for ratepayers by expanding access to low-cost power and helping to bring new generation and storage resources online more quickly. One recent analysis finds that three of these technologies could facilitate cost-effective interconnection of 6.6 GW of new solar, wind and storage in PJM by 2027.
Together, these tools can help make most of states’ existing electric grids by expanding generation, transmission, and distribution system capacity at a low cost. In this way, these tools can help rein in the spending that drives climbing electric bills – and create economic opportunity in the context of load growth.