By Dr. Ake Almgren, Chair – PJM Board of Managers
While we are currently in difficult and
uncertain times, we must, more than ever, stay focused on our core mission of
keeping the lights on – at the least cost – for the 65 million people we serve in
13 states and the District of Columbia.
Operating the bulk power grid amid a
pandemic is a new challenge, but we have faced large-scale threats and tests
Three months after I took my seat on
the PJM Board in 2003, the Northeast was plunged into a two-week-long blackout.
While the PJM region was, for the most part, unaffected, our experience helping
our neighbors in their restorations and learning from the event bolstered our
In more recent years, our operations
were challenged by the June 2012 derecho, followed later in that year by
Superstorm Sandy, and by the 2014 Polar Vortex.
We adapted our wholesale markets,
implemented lessons learned and came out stronger.
Together, we will get through this
newest challenge, and use the experience to help us prepare for the future.
Front Seat to
In a way, these high-profile events
represent concentrated examples of the adaptation going on in the ever-changing
electric industry landscape.
During 2004 and 2005, followed by a
smaller second wave from 2011 to 2013, PJM expanded most substantially and
created a truly regional transmission system with wholesale markets that have
proven their versatility and provided tremendous benefits to the consumers they
The economies of scale created by the
ability to move power across a large geographic region are substantial – our
value translates to annual savings to consumers of $3.2 billion to $4 billion.
Perhaps nothing signifies the change
the power industry has experienced over the past 20 years as much as the diverse
fuel mix we have today – driven by the competition our markets provide, the
shale gas revolution and the rise of renewable technologies.
Few, if any, may have been able to
predict this resource makeup when PJM’s competitive wholesale electricity
markets began operating over 22 years ago.
Markets accelerated the change in
resources. This change is unprecedented in size and speed. In the last 10 years,
about 30 GW have retired, while about 30 GW of new generation –
primarily natural gas – have come on. The
result is the lowest electric energy prices since 1997 and much reduced
emissions. In fact, between 2006 and 2016, among all of the states in the U.S.,
Ohio and Pennsylvania had the biggest absolute reductions in tons of CO2.
Transmission Is Key
This fast and huge transition in power
generation without compromising reliability would not have been possible
without a very robust transmission system. It is a vast transmission system we
operate, comprised of more than 84,000 miles of transmission lines across the
PJM footprint – 369,089 square miles –
and 6,650 substations, interconnecting with more than 180,000 MW of power
The strength of the transmission system
is the result of PJM’s planning and the transmission owners’
maintenance/modernization. PJM’s comprehensive and uniquely transparent
long-term Regional Transmission Expansion Plan (RTEP) process identifies the
need for changes and additions to the system up to 15 years in the future.
Planning such a large system is not a
trivial matter. In fact, as we have expanded the PJM footprint, we asked
ourselves, was it possible to plan for the whole region? It turned out that we
could do it, and we have continued to develop our forecasting models and
Transmission will remain the foundation
for reliability, resilience and efficient markets. If anything, with a future
of more variable resources on the system, the importance will be more, not
PJM Fosters Innovation
Throughout its history, PJM markets
have stimulated innovation. In particular, our ancillary services markets have
fostered new technologies like batteries. PJM was the first system operator in
the nation to have a grid-scale lithium ion battery system –
1 MW/250 kWh – installed on campus, demonstrating how
energy storage can help quickly balance short-term variations in electricity
In addition, we have supported
innovation by participating in pilot projects like we did for vehicle-to-grid
(V2G) charging of plug-in electric vehicles.
Looking forward, it is very important
that we continue to learn, adapt and innovate. We know that there will be more
variable resources (wind and solar) on the system, more distributed resources
(distributed generation, storage and demand response), and changing load
patterns with the increased use of electric vehicles. The challenge –
and the opportunity – is to find ways to
incorporate these and other changes in the most efficient way.
PJM Works Hand-in-Hand
With Members and Stakeholders
This is all a huge job, and PJM
Interconnection cannot do it alone. Our successes are only achieved in
collaboration with our membership, which now stands at over 1,000.
Ever since I joined the Board of
Managers, I have been impressed by the methodical stakeholder process. While at
times cumbersome, it is a dynamic forum with dedicated and engaged
professionals, representing companies and organizations from the five discrete
sectors, and who reach beyond their personal interests to work together to find
solutions in the ever-changing industry landscape. It is a great asset not to
Another important category of
stakeholders is the states within PJM. For a long time, we had a common
denominator: reliability at least cost. It is changing with states having more specific
public policies, not least in terms of clean energy. Looking forward, we must
find ways to incorporate the diverse interests of the 13 states and the
District of Columbia, while at the same time maintaining the integrity of the
markets and all of the shared benefits of operating over a large footprint.
For now, we must stay very focused on
our core mission of keeping the lights on. Like we have done in the past, we
will get through this with experiences we can learn from.
Turning the new lessons learned into
action – and continuing to adapt and innovate
in operations, planning and markets – will make us and the
whole PJM community stronger going forward.
Original source: PJM