U.S. Grid Operator Sounds the Alarm on Future Power Reserves

PJM Interconnection, the largest grid operator in the United States, released a report last week forecasting power supply and demand through 2030 for an area covering 65 million people. PJM Interconnection is a regional transmission organization (RTO) that moves wholesale electricity in the Mid-Atlantic, Ohio, and D.C., as well as parts of Indiana and Illinois. The RTO’s report predicts a decline in its power reserves by 2030 due to an accelerated retiring of coal and natural gas plants. Couple those closures with an expedited shift towards renewable projects that are not yet operational, and a potential lack of power reserves could spell trouble.

Another important aspect of the potential issue is that PJM often provides extra power to neighboring grids depending on their service. Much of the electricity generated by PJM is from fossil fuels and in case neighboring states lose reliability for any reason, PJM will export their reserves to those areas. The Wall Street Journal editorial board’s recent piece on the topic highlighted this exact situation in February, saying “when wind power plunged in the Midwest and central states late last week, PJM helped fill the gap between supply and demand and kept the lights on.” With the grid operator foreseeing a reduction in their power reserves due to the closure of fossil fuel plants, PJM may be unable to supplement other states in situations such as these. The report predicts that roughly 21% of PJM’s current capacity is at risk of retiring by 2030, enough to light 30 million homes. 

An issue adjacent to the report’s forecasting is the lack of movement on renewable projects. In the best case, the report predicts that 21,000 MW of solar, wind and battery storage capacity will be introduced to the grid by 2030. That is only about half the amount of energy needed to replace coal and natural gas plants that are closing.

Lawmakers on Capitol Hill and leaders in federal agencies across the country should take notice of PJM’s report and engage with the relevant stakeholders so that none of the worst-case scenarios come to fruition.

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