PJM Interconnection. Drexel University Great Works Symposium May 13, 2010

Transcription

1 PJM Interconnection Drexel University Great Works Symposium May 13,

2 Outline PJM Overview PJM Markets Regional Transmission Expansion Plan Generation Interconnection Renewables Smart Grid 2

3 PJM Overview 3

4 PJM Functions Operate the bulk electric power grid for reliability Facilitate various electric markets Plan for transmission expansion 4

5 PJM as Part of the Eastern Interconnection 6,038 substations KEY STATISTICS PJM member companies 600 millions of people served 51 peak load in megawatts 144,644 MWs of generating capacity 164,895 miles of transmission lines 56,500 GWh of annual energy 709,500 generation sources 1,325 square miles of territory 168,500 area served 13 states + DC 26% of generation in Eastern Interconnection 23% of load in Eastern Interconnection 19% of transmission assets in Eastern Interconnection 19% of U.S. GDP produced in PJM 5

6 PJM Transmission Owners 6

7 Future changes to PJM Footprint FirstEnergy Corp. s announcement that its Ohio and Penn Power operating companies intend to join PJM and withdraw from the Midwest ISO. Under the plan, the three Ohio utilities Ohio Edison, Cleveland Electric illuminating and Toledo Edison and Penn Power would join PJM on June 1, /31/2008 Post FE Integration Peak demand 144,644 MW 156,875 MW Generating capacity 164,895 MW 176,325 MW Transmission miles 56,350 miles 60,823 miles 7

8 ISOs and RTOs with TVA AESO IESO ISO New England Midwest ISO New York ISO PJM California ISO SPP TVA ERCOT 8

9 Nine Major N. American RTOs / ISOs PJM is currently the largest centrally dispatched entity in North America * Peak load in MW as of Summer, 2006 PJM - 144,644* MISO - 136,520 ERCOT - 63,056 California - 50,538 New York - 33,879 New England - 27,401 9

10 PJM EDF (France) PJM in the World 165,000 MW Installed Capacity 247 Interties 1,271 Generating Units 56,500 miles of transmission 83,000 MW Installed Capacity 41 Interties 608 Generating Units 30,162 miles of transmission Tokyo Electric State Grid Corporation of China National Grid (England & Wales) RAO UES of Russia 64,000 MW Installed Capacity 3 Interties 147 Generating Units 43,857 miles of transmission 436,000 MW Installed Capacity Interties 44,169 miles transmission (330kV +) 75,600 MW Installed Capacity 2 Interties 212 Generating Units 14,552 miles of transmission 210,500 MW Installed Capacity Interties Generating Units 94,747 miles of transmission (220kV +) Power Grid Corporation of India 126,994 MW Installed Capacity 23 Interties 1,000 Generating Units 117,228 miles of transmission (220kV+) 10

11 How is PJM Different From Your Local Utility? PJM does: Maintain the big picture of the transmission system regardless of ownership. Have, by agreement, operational control of the transmission system. Operates as profit neutral. Remains totally independent of all PJM members. Coordinates maintenance of generation and transmission systems. 11

12 How is PJM Different From Your Local Utility? PJM does not: Own any transmission or generation assets. Operate any equipment. Function as a publicly traded company. Take ownership of the energy on the system. Perform maintenance on generators or transmission systems. Serve, directly, any end use (retail) customers. 12

13 PJM Authority Provided by Contract Reliability Assurance Agreement PJM Operating Agreement Transmission Owners Agreement PJM OAT Tariff Regional Transmission Provider Regional Control Area Operator Market Developer and Coordinator Regional Transmission Planner ReliabilityFirst Agreement NERC Security Coordinator 13

14 PJM Governance Independent Board Members Committee Generation Owners Transmission Owners Other Suppliers Electric Distributors End-Use Customers 14

15 PJM Electricity Markets 15

16 PJM s Operational Markets and Services 2 Energy Markets Day Ahead Real Time Capacity Market Reliability Pricing Model (RPM) Auction Financial Transmission Rights Auction Ancillary Services Regulation Market Synchronized Reserve Market Black-start Service Reactive Services 16

17 What is LMP? Locational Marginal Price Pricing method PJM uses to price energy purchases and sales in PJM Market prices transmission congestion costs to move energy within PJM Control Area Physical, flow-based pricing system how energy actually flows, NOT contract paths Cost to serve the next MW of load at a specific location, using the lowest production cost of all available generation, while observing all transmission limits. 17

18 Locational Marginal Price Generation Marginal Cost Transmission Congestion Cost Cost of Marginal Losses 18

19 Regional Transmission Expansion Process 19

20 Regional Transmission Expansion Process Since the inception of PJM s RTEP process in 1999, more than $13.2 billion in transmission upgrades and additions have been authorized by the PJM Board. This amount includes about 1,700 distinct transmission projects ranging from 69-kilovolt (kv) to 765-kilovolt-related projects. About $11.3 billion of the baseline transmission network upgrades across PJM are designed to ensure that the reliability standards of the North American Electric Reliability Corporation (NERC) will continue to be met with respect to such issues as load growth and generation retirements. 20

21 RTEP Process 21

22 Changing drivers for transmission planning Forecasted growth in electricity use, demand-side-response efforts and distributed generation additions (smaller generators located near where the power is used); Requests by developers of new generating resources and non-utility transmission facilities to connect to the grid; Opportunities to lower the cost of wholesale power by addressing congestion; Potential risk of aging transmission facilities, many more than 40 years old; 22

23 Changing drivers for transmission planning Requests by wholesale customers seeking firm, long-term point-topoint transmission service across PJM for a year or more; Generation retirements and other unit deactivations; Transmission improvements by utilities to address local issues; and Operational issues 23

24 PJM RTO Load Forecast 24

25 Mid-Atlantic Load Forecast 25

26 PJM Backbone Transmission System 26

27 Approved PJM Backbone 765 kv and 500 kv Facilities 27

28 Adding New Generation

29 Follows FERC Pro Forma Process Queues are open for a 3 month period Spreads Workload Out Over the Year continuously accepting requests Generation, Merchant Transmission, and Long-Term Firm Transmission Service Queues are Fully Integrated Specific Rights Based on Queue Position and Satisfaction of Milestone Requirements Feasibility, System Impact, and Facilities Studies Identify Required Upgrades Studies provide progressively more detail Interconnection Process Overview Queue volume and drop-out rate require frequent re-studies Required Transmission Upgrades Based on Reliability Criteria paid by developer 29

30 Queue Status through Sept. 18, 2009 Active (in the study process) projects totaling 69,088 MWE (36,288 MWC) Fuel type Wind 168 projects Natural Gas 57 Solar 28 Methane 26 Coal 22 Nuclear 13 30

31 REQUESTS Generation Queue Request Volumes A B C D E F G H I J K L M N O P Q R S T U1 U2 U3 U4 V1 V2 V3 QUEUE 3-month queues 31

32 Fuel Mix of Existing PJM Installed Generating Capacity (RPM - eligible, 12/31/09) 32

33 Fuel Mix of Generation in PJM s Interconnection Queue (1/31/10) 33

34 Interconnection Challenges Queue Volumes and Project Withdrawals As many as 125 requests over 6-month queue during 2007/08 88% queue drop-out rate on a per MW basis Substantial Number of Wind Projects, particularly in Western PJM Complexity of stability analyses Frequent data changes require re-study Significant west-to-east transmission required for deliverability Impacts snowball through all subsequent projects Substantial Merchant Transmission Withdrawals to NY in the queue Significant west-to-east transmission required for deliverability Impacts snowball through all subsequent projects 34

35 Elephant in the Room CO

36 PJM CO 2 Footprint 36

37 Marcellus Shale 37

38 Renewable Energy 38

39 Renewable Portfolio Standards WA: 15% x 2020* OR: 25% x 2025 (large utilities)* 5% - 10% x 2025 (smaller utilities) CA: 33% x 2020 NV: 25% x 2025* AZ: 15% x 2025 MT: 15% x 2015 UT: 20% by 2025* / February 2010 ND: 10% x 2015 SD: 10% x 2015 CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* NM: 20% x 2020 (IOUs) 10% x 2020 (co-ops) KS: 20% x 2020 MN: 25% x 2025 (Xcel: 30% x 2020) WI: Varies by utility; 10% x 2015 goal IA: 105 MW MO: 15% x 2021 MI: 10% + 1,100 MW x 2015* IL: 25% x 2025 VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 NY: 29% x 2015 OH: 25% x 2025 WV: 25% x 2025* VA: 15% x 2025* NC: 12.5% x 2021 (IOUs) 10% x 2018 (co-ops & munis) DC ME: 30% x 2000 New RE: 10% x 2017 NH: 23.8% x 2025 MA: 15% x % annual increase (Class I RE) RI: 16% x 2020 CT: 23% x 2020 PA: 18% x 2020 NJ: 22.5% x 2021 MD: 20% x 2022 DE: 20% x 2019* DC: 20% x 2020 TX: 5,880 MW x 2015 HI: 40% x 2030 State renewable portfolio standard State renewable portfolio goal Solar water heating eligible Minimum solar or customer-sited requirement Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources 29 states + DC have an RPS (6 states have goals) 39

40 Renewable Portfolio Standards State RPS State Goal State RPS Targets: NJ: 22.5% by 2021 MD: 20% by 2022 DE: 20% by 2019 ^ DC: 20% by 2020 PA: 18%** by 2020 IL: 25% by 2025 OH: 25%** by 2025 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) MI: 10% + 1,100 MW by 2015 ^ VA: 15% by 2025 ^ WV: 25%** by 2025 ^ / September

41 Wind Queue Status through September 9, 2009 In-Service - 1,856 MWE Under Construction - 2,522 MWE Suspended - 1,270 MWE Active (in the study process) - 44,455 MWE Withdrawn - 11,864 MWE Total off-shore wind projects - 14 projects Still active - 5 projects In Service - None 41

42 Wind-Powered Generation Clusters in PJM 42

43 Solar Queue Status through March 4, 2010 In-Service - 1 project 2 MWE Under Construction - 6 projects 100 MWE Active (in the study process) - 85 projects 1,000 MWE Withdrawn - 8 projects 57 MWE 43

44 Proposed Renewable Generation in PJM As of March 31,

45 Wind and Solar Differences Studied at reduced Capacity Interconnection Rights Wind 13% Solar 38% Wind clusters Light load areas and lower levels of transmission Heavy concentration in Western PJM Technology churn Manufacturer shifting during studies and after, requiring re-study Solar Interconnections Most at distribution level Outpacing distribution 45

46 Renewable Energy Dashboard As of March 31,

47 Wind Integration Issues Transmission Costs and Allocation are a Circular Discussion Transmission Requirements in the Tens of Billions of Dollars (west to east) Costs are assigned to Generators in PJM Tariff Generation is in the Queue Now, Transmission Will Take a Very Long Time to Build PJM Market Efficiency Analysis Will Not Build for Hypothetical Generation Development Build It and They Will Come Approach Would Commit to Huge Costs Must Have Certainty as to Generation Development and Recovery of Transmission Investment State and/or Federal Mandates Required to Break Log Jam? 47

48 Joint Coordinated System Plan (JCSP) Interregional Studies of Higher Penetrations 20% Wind - $80B in Transmission 48

49 Eastern Wind Integration Transmission Study Next step of integration study DOE commissioned EWITS through its National Renewable Energy Laboratory (NREL) The study was designed to answer questions posed by a variety of stakeholders about a range of important and contemporary technical issues related to a 20% wind scenario One of three current studies designed to model and analyze wind penetrations on a large scale uses a deterministic, chronological production-cost model (PROMOD IV )1 for evaluating transmission requirements 49

50 States Regional Policy recommendations State energy policies Eastern Interconnection Planning Collaborative Rolls-up regional plans Coordinates with Canada, Western Interconnect and Texas Receives stakeholder input and holds public meetings Performs studies of various transmission alternatives against national, regional and state energy/economic/environmental objectives Identifies gaps for further study Publishes Annual Interconnection Analysis Annual interconnection analysis DOE/FERC Provides policy direction, assumptions & criteria States Policy recommendations State energy plans Regional/state compliant plans provided as input Study gaps relative to national, regional and state policy ISO / RTOs & Order 890 Entities Produce Regional Plan through regional stakeholder process, including state regulatory authorities Regional Plans FERC Review/direction Order adjustments Cost recovery 50

51 Wind Operational Challenges Rapid increase in wind-power production Expecting about 10,000 to 12,000 MW of capability by 2015 High variability and uncertainty of wind-power Ramping 51

52 MW Intermittent Wind Generation 3,000 PJM Wind Output vs Capability 2009 MW CAPACITY 2,500 Capacity Factor = 24.8% 2,000 1,500 1,

53 Wind Operational Challenges PJM is not experiencing any reliability problems because of issues with wind farms, but problems may arise as wind penetration increases in the real-time market. Automation of dispatch due to levels of communication required when wind farms have multiple operators. Importance of forecasting wind generation 53

54 The Fine Print on Renewables Wind and solar is coming, but not on the peak hours (13% available at the time of peak for wind, 38% for solar) Energy Storage is needed to ensure renewables achieve their potential 54

55 Storage

56 AES Grid-Scale Energy Storage System Operational Details Altairnano, Inc Lithium Ion nano titanate battery Power: 1 MW for 15 minutes Energy: 300 kwh Usable Charge Range: 5% - 99% Efficiency: 90% round trip 56

57 Fast Regulation: Speed Matters A fossil power plant following a regulation command signal Energy Storage Output Regulation Signal Energy Storage (batteries / flywheels) accurately following a regulation command signal 57

58 PHEV- Win, Win, Win, Win 1. Reduce Oil Imports/Energy Independence 2. Reduced Cost of Fuel and Cash Back 3. Reinvent Auto Industry 4. Recharge Off Peak/ Higher Use of Power Industry Assets 58

59 60 Electric Vehicles Becoming More Popular Due to Recent Fuel Price Hikes (PJM Off-peak Price or 0.51 /liter 0.12 Liter) 75 per Gallon ^ 59

60 Flywheels Attributes Rapid charging minutes Life expectancy ~20 years No capacity decreases over life. Price of 1 MW System = $1,500 K Return on Investment = 23% (assumes average regulation price of $40/MWh) 60

61 Compressed Air Energy Storage (CAES) Developers are evaluating projects to develop, design, construct and operate CAES PJM analyzing accommodating CAES capabilities in existing PJM market structure 61

62 Smart Grid 62

63 Information Flow for Today s Grid Generation Load System Operator residential TO* EDC* industrial Transmission substation Distribution substation commercial TO = Transmission Owner EDC = Electric Distribution Company 63

64 Smart Grid Consumer Devices Energy Users Energy Providers Distribution Network Operations Transmission 64

65 Smart Grid Network - Smart Home Smart Appliance Energy Management Smart Charger (PHEV) Storage Aggregator Grid Signal Regulation Signal Price Signal Reliability Load Curtailment 65

66 connection to the grid 66

67 Smart Grid Network Alternative Generation Resources System/Market Operator Load in GW Economic Dispatch Hour of Day 67

68 Smart Grid with Eyes Wide Open It s about: Making cyber-security paramount Intelligent workforce Educating customers to automate prices to devices Integration of market signal, wires and customer devices 68