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PJM Ready for Winter Demand Amid ‘Less-Certain’ Weather Outlook

The PJM Interconnection has more than enough capacity to meet the forecasted peak electricity demand for the upcoming winter, the grid operator said Wednesday.

PJM expects to have 185,611 MW available this winter, versus projected peak demand of 135,506 MW. The all-time winter peak was 143,295 MW on Feb. 20, 2015.

“Because of our members’ preparation efforts and history of reliable performance, improved coordination with gas pipeline operators, and the market’s ability and flexibility to call on a variety of resources, we’re confident that we will be able to meet customer demand this winter,” PJM Vice President of Operations Michael Bryson said.

PJM's system, spread over 13 states and Washington, DC, has seen an increase in natural gas-fired power generation in its footprint in recent years, driven largely by the low prices created by Appalachian shale production. From 2010-2016, the system was 33% coal-fired, 33% natural gas, 18% nuclear and 6% renewables. That's compared to 2005, when coal and nuclear resources generated 91% of the electricity on the PJM system.

In addition to looking at weather predictions, PJM said it also analyzed potential pipeline disruptions as part of its winter preparations, and it foresees “no associated reliability concerns for the coming winter.”

PJM said it’s prepared despite a “less-certain winter weather forecast,” with climate models suggesting a warmer season but “studies of similar seasons” pointing to near- or below-average temperatures. The polar vortex could weaken later in the season and allow more arctic air to push south for short periods of intense cold, according to the grid operator.

Last winter, PJM saw electricity demand peak at 137,522 MW on Jan. 5, 2018 during an 11-day cold snap that sent natural gas spot prices soaring, especially in the Mid-Atlantic and Northeast. The grid operator said the region’s generation and transmission assets performed well under the adverse conditions during last winter’s early-January cold snap. In February, PJM released a report finding that a major increase in related uplift charges during that peak demand period  pointed to the need to reform pricing for energy and reserves.

“Even during peak demand, PJM had adequate reserves and capacity available, and capacity performance market rules resulted in more efficient and dependable generator performance,” PJM said.

Unlike last winter, however, this winter the market will have to navigate a yawning natural gas storage deficit that has helped drive up prices across both the physical and futures markets. Recent data on Lower 48 power generation by fuel source has shown evidence of gas-to-coal switching in response to the higher gas prices, analysts with Genscape Inc. have said.

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