Nov. 01–CLEVELAND, Ohio — The nation’s largest independent electric grid manager today said the fuel power plants use will become increasingly important for grid stability in the future as natural gas replaces coal and nuclear plants.
PJM Interconnection, the independent grid manager in Ohio, 12 other states and the District of Columbia, released the initial results of an intensive analysis into “fuel resiliency” and its impact on the grid both now and five years into the future.
PJM has no standards for resiliency, but instead focuses on reliability. In this case, PJM tried to look at the threats to extended operation of the grid serving 65 million people as coal and nuclear power plants continue to shut down in the face of much less expensive power from gas turbine plants.
“I think there are actions we will need to take related to valuing fuel security,” said Andrew Ott, president and CEO of PJM, during a news conference to announce the study results.
He said the study found that it is possible — though not likely — that over-reliance on natural gas power plants during extreme winter weather could lead to problems as early as 2023 because of the anticipated future shutdowns of coal and nuclear plants.
His comments were an indication that PJM has been trying to come to terms with assertions by FirstEnergy and its former power plant subsidiary FirstEnergy Solutions that PJM has not properly priced the value that coal and nuclear plants bring to the grid because they can store fuel on-site.
But Ott insisted that the power markets can address the problem rather than the heavy hand of government, a reference to FirstEnergy’s efforts to persuade President Trump’s administration to intervene in competitive markets.
Six months in the making, the analysis relies on computer simulations of 300 scenarios involving multiple events including continued coal and nuclear plant shutdowns, extremely cold weather, gas pipeline problems, fuel oil shortages for oil-burning plants, and attacks on the power grid itself.
“Overall the findings do show that the system can withstand an extended period of stress while remaining reliable and fuel-secure in most circumstances,” Ott said.
But that robust quality that has characterized the PJM system for decades could fail under a mix of extreme circumstances, the digital simulations show.
“We stressed the system to look at extreme — but plausible — scenarios,” said Ott. “They could occur. We do see a risk that we could get into situations where we couldn’t meet all the demand under certain circumstances.
“While we don’t have a problem today, or tomorrow, as we look into the future we will be looking to analyze this [failure], discuss the risk, discuss the assumptions… and make an assessment of the type of actions we need to take,” Ott said.
And those actions will be not be made until PJM members hash out the possible fixes — and the costs, said Michael Bryson, vice president of operations and one of the authors of the intensive study.
“Whatever steps we put in place has to be cost effective for consumers. We are not looking to overbuild. We’ll be engaging stakeholders,” he said, referring to PJM member utilities and power producers. “Very vibrant discussions today,” he said of the first discussions early Thursday morning. Our target is to work with stakeholders and work through 2019 to come up with solutions.
“We will also continue to work with gas pipelines. We have been doing that for the past couple of years,” Bryson said, stressing that pipeline companies are not PJM members. “I think one of the side benefits for PJM in doing this analysis is that we really got to roll up our sleeves with the natural gas industries.”
He said the analysis also revealed that PJM needs a lot more information about the fuel oil industry and its role in supplying gas turbine plants that are designed to run either on natural gas or fuel oil and store the fuel oil onsite. Such “dual fuel” plants are an answer to the charge that gas turbine plants are only as reliable as the pipelines feeding them.
Many of the new highly efficient gas turbine plants have “firm contacts,” meaning their gas suppliers have guaranteed they will receive fuel in extreme events.
Bryson said the gas turbine fleet currently has a total generating capacity of 74,000 megawatts, but that plants supplying 16,000 megawatts of that total do not have firm contracts.
He said PJM has considered requiring new gas turbine plants to have firm contracts or dual fuel capability.
The release of the study comes as the Federal Energy Regulatory Commission continues to look into the same issue, an issue stoked by coal mine owner Robert Murray and FirstEnergy and FirstEnergy Solutions. They have argued that coal-burning power plants and nuclear plants are inherently more reliable because they can store fuel onsite for months.
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