regional transmission webinar series pjm-interconnection · 35 ©2004 pjm ... rfi responses...
TRANSCRIPT
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Regional Transmission Webinar Series
PJM-Interconnection
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Who we are and what we do:
We support policies that modernize the nation’s electric power network and unlock clean energy and economic opportunities across the country. The backbone of a clean electricity system and a strong economy is a resilient and reliable transmission
grid. Smart state and federal policies that improve the way the grid is developed, planned, and paid for will help it become a
more robust, reliable, and secure network that supports expansion of renewable energy, competitive power markets,
energy efficiency, and lower costs for consumers.
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Regional Transmission Summits
•Minnesota (Great Plains)•Oregon (Pacific Northwest)•Iowa (Midwest)•Kansas (Heartland)•Massachusetts (New England)•Ohio (PJM-Interconnection)•Nashville (Southeast)•Denver (Rocky Mountain)
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Regional Transmission Webinar Series
• Pacific Northwest (Concluded)• Midwest (Concluded)• Heartland – (Concluded)• New England – (Concluded)• PJM – January 24th, 2014• Southeast – Week of February 3rd (tbd) • Rocky Mountain – Week of February 17th (tbd)• Great Plains - (To Be Determined)• National - (To Be Determined)
• Stay tuned for exact dates
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©2004 PJMwww.pjm.com 5
ENVIRONMENT AND RELIABILITY IN A RESTRUCTURED ELECTRICITY
WORLD…
Looking Backward to Look Forward
Craig Glazer
Vice President
PJM Interconnection
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©2004 PJMwww.pjm.com 6
“We’re Mad as Hell
and We’re Not Going
to Take It Anymore!”
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©2004 PJMwww.pjm.com 7
The Days of Yesteryear: The Scene at the Retail Level
• Electric Rates Far Above National Average
• Price Spikes of the mid-1990’s
• Special Contracts: “What’s My Competition
Getting and Why Can’t I Get it Too?”
• Risks borne by the customer: Affiliate mines,
stranded costs, nuclear cost overruns,PURPA
“must purchase” contracts …
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©2004 PJMwww.pjm.com 8
The Days of Yesteryear: The SceneAt the Wholesale Level
• Price Spikes---Lack of Transparency
• Price Squeeze: “Refunds to a corpse”
• Interconnection Costs— “Take it or leave
it”
• Demand ratchets, “take or pay”
agreements…you name it…
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©2004 PJMwww.pjm.com 9
The Regulatory World Circa 2005
• Reminding the Regulator What
We Got Right: Taking credit for
our accomplishments
• Building on Past Experience:
Learning What Needs Further
Work
• Avoiding the Quagmire of
Inaction
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©2004 PJMwww.pjm.com 10
Restructuring: The Good, the Bad and the Ugly
Accomplishment No. 1:
We moved the Risk Allocation Formula:
aka “There was no Enron rate case!
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©2004 PJMwww.pjm.com 11
Pre-and post Enron prices
Mean PJM RTO LMP
$0
$5
$10
$15
$20
$25
$30
$35
2/5/
2002
2/6/20
02
2/7/20
02
2/8/
2002
2/9/20
02
2/10
/200
2
2/11
/200
2
2/12
/200
2
2/13
/200
2
2/14
/200
2
2/15
/200
2
2/16
/200
2
2/17
/200
2
2/18
/200
2
2/19
/200
2
$/M
Wh
Enron
Collapse
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©2004 PJMwww.pjm.com 12
Shifting the Risk
• Consumers are
paying for higher
commodity costs not
“bail-outs”
• If anything, capacity
prices too low
• Markets delivering
signals: We need to
react to them wisely
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©2004 PJMwww.pjm.com 13
Restructuring: The Good, the Bad and the Ugly
Accomplishment No. 2:
We got the fundamentals right!
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©2004 PJMwww.pjm.com 14
PJM as Part of the Eastern Interconnection
KEY STATISTICS
PJM member companies 750+
millions of people served 60
peak load in megawatts 163,848
MWs of generating capacity 185,600
miles of transmission lines 65,441
GWh of annual energy 832,331
generation sources 1,365
square miles of territory 214,000
area served 13 states + DC
Internal/external tie lines 142
• 26% of generation in
Eastern Interconnection
• 28% of load in Eastern Interconnection
• 19% of transmission assets in
Eastern Interconnection
21% of U.S. GDP
produced in PJM
www.pjm.com
As of 1/4/2012
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©2004 PJMwww.pjm.com 15
Energy Market: Increased Efficiency
• Lower energy prices across the expanded PJM region
– ESAI’s technical study: region-wide energy price without
integration would be $0.78/MWh higher in 2005 than with
integration.
– Spreading these savings over the total PJM RTO’s energy
demand of 700 terawatt-hours (TWh) per year yields aggregate
savings of over $500 million per year.Pre-Integration Price Pattern Post-integration Energy Price Pattern
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©2004 PJMwww.pjm.com 16
eData
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©2004 PJMwww.pjm.com 17
Accomplishment No. 3
New Players and new tools to meet future
demand:
• Demand Side Response
• Energy Efficiency
• Smart Grid
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©2004 PJMwww.pjm.com 18
Demand Resource in the Capacity Market-2014/2015
www.pjm.com
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©2004 PJMwww.pjm.com 19
PJM©201110
Offers of Demand-Side Resources as
Capacity in PJM by Delivery Year
www.pjm.com
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015
Energy Efficiency
RPM and FRR DR
Interruptible Load for Reliability
Active Load ManagementPrior To RPM
ImplementationRPM Implementation
DR cleared in auction or self-supplied
Energy Efficiency
DR committed 3 months before delivery year
Active Load Management
www.pjm.com
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©2004 PJMwww.pjm.com 20
Installed Capacity in PJM (MW)
www.pjm.com
Coal, 75,267 MW, 41%
Gas, 50,525 MW, 28%
Nuclear, 33,146 MW, 18%
Oil, 11,217 MW, 6%
Hydroelectric, 8,047 MW, 4%
Wind, 4,996 MW, 3%
Solid Waste, 705 MW, 0%
Solar, 40 MW, 0%
Source: Third Quarter 2011
State of Market ReportWind Dependable Capacity = 649.5 MW/13%
Solar Dependable Capacity = 15.3 MW/38%
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©2004 PJMwww.pjm.com 21
Proposed Generation (MW)
www.pjm.com
As of January 4, 2012
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©2004 PJMwww.pjm.com 22
THE GOOD NEWS: ROBUST ACTIVITY IN THE RTO QUEUE
Proposed Renewable Generation in PJM
www.pjm.com
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©2004 PJMwww.pjm.com 23
THE CHALLENGES AHEAD…
POLICY CHOICES…
The Long and Winding Road…
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©2004 PJMwww.pjm.com 24
The Past
• Transmission: Built to support
major generation projects
• Connect distant generation to
load; Distribution: One way
delivery of power to the home
• Grid Costs: Rate-based to the
home utility’s customers
• ROI: Little focus on
transmission as a stand alone
business element
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©2004 PJMwww.pjm.com 25
Policy Choices: Deciding What We Want?
Policy Choice #1
Is the grid an enabler or a
competitor?
Grid as an Enabler?
–Accept the grid as a
natural monopoly
–Drive solutions through
regulation
–Provide incentives for
innovation
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©2004 PJMwww.pjm.com 26
Policy Choices: Deciding What We Want?
Policy Choice #1 (cont’d)
Grid as a Competitor?
–Grid development must compete with generation or demand side
–Grid entrepreneurs take risk: no guaranteed ROI
–Grid pricing reflects competitive outcomes: Bid solutions into the marketplace (RPM)
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©2004 PJMwww.pjm.com 27
The Policy Choices: Defining What We Want?
Policy Choice #2: A Strong or Weak Grid?
Characteristics of the “Strong” Grid:
• Generation distance from load
• Meet the needs for future transmission
expansion
• Costs socialized to reflect
interconnected nature of
the grid
• Broad regional approach
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©2004 PJMwww.pjm.com 28
The Policy Choices: Defining What We Want?
Policy Choice #2-The Alternative:
The localized grid…
• Generation closer to load
• Centralized focus on development of DSR, energy efficiency and renewables
• Transmission/distribution grid as an enabler of alternative generation
• Transmission focused on meeting state/local needs
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©2004 PJMwww.pjm.com 29
The Strong vs. Weak Grid Debate
Policy Choice #2: Decision Points
• Siting: Regional vs. Local Needs
• Cost Allocation: Socialization vs. Direct
Assignment
• IRP/RPS vs. Competitive Procurement
• Short term procurement vs. long term
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©2004 PJMwww.pjm.com 30
The Policy Choices: Defining What We Want?
Policy Choice #3: Determine
the Planning Philosophy
– Transmission decisions
driven by generation
investment or generation
investment influenced by
the planned transmission
grid?
– Role of the Planning
Authority
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©2004 PJMwww.pjm.com 31
An Added Complication:
Who Decides?
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©2004 PJMwww.pjm.com 32
Who Decides?
• States:
– State Energy Policies:
Governors/legislators
– State PUCs
• FERC
– FERC Review of Planning
• Who chooses projects?
• Environmental Agencies
– Non-attainment areas
– RGGI et al.
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©2004 PJMwww.pjm.com 33
AVOIDING THE QUAGMIRE OF INACTION
“Hanging in mid-air”: a dangerous place
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©2004 PJMwww.pjm.com 34
The Task Ahead: Blocking, Tackling & Teamwork!
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©2004 PJMwww.pjm.com 35
LET’s TALK
LET’S TALK…
Craig Glazer
Vice President-Federal Government
Policy
PJM Interconnection
202-393-7756
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We Don’t Need to Be 144 GW-Bold
Deral Danis
HVDC + Utility Scale Wind as Part of
the Right Resource Mix
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37
National Grid brings extensive experience in building, owning, and operating large transmission projects in the United States
and overseas
National Grid owns and operates more than 8,600 miles of transmission in the United States
National Grid joins Clean Line’s existing investors that include
private equity firm ZBI Ventures
National Grid is a key investor in Clean Line Energy
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Clean Line’s projects connect the best wind resources
to load centers
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HVDC is the most efficient method to transmit large
amounts of electricity over long distances
• Improved reliability — Control of power flow enhances system
stability and lowers cost of integrating wind
• More efficient — Lower line losses
• Lower cost — Requires less infrastructure, results in lower costs and
lower prices for delivered renewable energy
• Direct connection to PJM
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0.37 0.09 0.03
0.37 0.19 0.07
0.09 0.19 0.75
0.03 0.07 0.75
KS IA IL IN
KS
IA
IL
IN
Correlation of 10-Minute Wind Energy Generated Low correlation
Medium correlation
High correlation
Source: EWITS; Clean Line analysis
Wind Production Correlation of Best Capacity Factor
Sites Across Five States
.00 .02 .15 .19PA
1. “Low correlation”: between 0.0 and 0.25; “Medium correlation”: between 0.25 and 0.5; “High correlation”: between 0.5 and 1.0
.00
.02
.15
.19
PA
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Rock Island and Grain Belt Express Interconnections
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13,500+ MWpotential capacity
=enough to fill Grain Belt Express 3+ times
RFI responses indicate abundance of projects that
need transmission to deliver wind energy to market
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0
20
40
60
80
100
120
140
160
180
200
2015 2017 2019 2021 2023 2025
Current renewables supply
Overall demand
RPS demand will drive major new wind installations,
especially in the Eastern Interconnect
Source: EIA; DSIRE; AWEA
Renewable energy supply and demand in PJM and MISO states
Thousand GWh 1
2
1. Energy from existing wind, biomass, and solar projects within the PJM and MISO states
2. Demand for renewable energy credits within PJM and MISO. States with voluntary goals are not included in the demand calculations.
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An HVDC Renaissance
June 2013: “China takes HVDC to new level”
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88.6GW to be added to the existing 55.2GW by 2015
That’s a BOLD 144 GW
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www.cleanlineenergy.com
Follow Clean Line on Twitter
@cleanlineenergy
Visit Clean Line’s YouTube channel
www.youtube.com/user/cleanlineenergy
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EN ABL IN G A
H IGH LY
R EN EWABL E
EL EC TR IC ITY
SYSTEM
LENA HANSEN
24 JANUARY 2014
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ABOUT RMI AND ELAB
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REINVENTING FIRE’S 2 HIGH-RENEWABLE
SCENARIOS
Renew Transform80%
renewables,
largely
centralized
80%
renewables,
50%
distributed
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NOT SURPRISINGLY, MORE TRANSMISSION
NEEDED IN RENEW COMPARED TO MAINTAIN
BASE CASE
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• Other studies have similar findings
– NREL’s Renewable Electricity Futures Study identified an incremental
transmission investment of $97B nationally from 2011-2050
– PJM Renewable Integration Study also calls for more transmission—
critical to access best renewables and facilitate operations by better
linking balancing areas
• These studies all focused on centralized renewables
• Important question – what is the optimal balance of centralized and
distributed resources, and what are the implications on transmission
needs?
ROLE FOR DISTRIBUTED RESOURCES IN
ALLEVIATING TRANSMISSION NEEDS?
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A FEW THOUGHTS ON DISTRIBUTED
RESOURCES
NREL
REFS
RF
Renew
RF
Transform
Transmission
investment
(2011-2050,
$B, $2009)
$98 $60 $54
• Efficiency is key
• Increasing levels of distributed
resources likely from customer
choice—need to minimize overbuilding
• Value can include energy, generation
& grid capacity, and ancillary services
Distributed solar T&D capacity benefit
estimatesNational transmission investment
estimates
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HIGHLIGHTS: DISTRIBUTED RESOURCES IN PJM
• 14,000 MW of demand response and
energy efficiency have cleared in forward
capacity market auctions in past 5 years—
by far largest share of new resources
• Significant fuel cell deployment, ~ 30 MW
• eV2g pilot project actively participating in
PJM’s frequency response market, which
necessitated new rules around minimum
size and value for performance
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• Build better understanding of how DERs can alleviate transmission
congestion
• Increase transparency into the distribution system—shift to more detailed
information on where DERs are
• Assess need for more stringent operating parameters to optimize
resource use and reduce costs
• Improve DER forecasting capability and find solution to uncertainty
issue—integrate more fully into planning
• Continue to drive toward more level playing field for NTAs
LOOKING AHEAD—KEY ENABLERS TO
LEVERAGING VALUE FROM DISTRIBUTED
RESOURCES (DERS)
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Creating a clean, prosperous,
and secure energy futureTM
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WHAT IS THE SUSTAINABLE FERC PROJECT?
NGO COALITION
• Founded in 1996
• Housed in NRDC
FERC • RTOs • ISOs • REGIONAL TRANSMISSION PLANNING PROCESSES
Renewable energy
Demand response
Distributed generation
Energy efficiency
REPRESENTS ENVIRONMENTAL COMMUNITY VIEWS AT :
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WHO IS THE SUSTAINABLE FERC PROJECT?
A L L I S ON
J O H N
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IS PJM PLANNING FOR A LOW CARBON FUTURE?
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FERC
transmission
planning
operationsmarkets
DEPLOYING RENEWABLES, DISTRIBUTED GENERATION AND ENERGY EFFICIENCY
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WHAT DOES PLANNINGREQUIRE?
Loca l – Order 890
Reg iona l – RTOs/Order 1000
Inte r reg iona l – Order 1000?
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PJM –PLANNING FOR RENEWABLES?
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PJM –PLANNING FOR RENEWABLES?
O R D E R 1 0 0 0
- p u b l i c p o l i c y c o n s i d e r a t i o n
- c o s t a l l o c a t i o n
M U L T I - D R I V E R A P P R O A C H
R P S P L A N N I N GS T U D I E S
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PLANNING FOR A LOW-CARBON FUTURE:RECOMMENDATIONSP L A N F O R P U B L I C
P O L I C I E S
I N C R E A S E S T A T E E N G A G E M E N T O N P L A N N I N G / C O S T S O V E R T I M E
P L A N F O R R E I N T E G R A T I O N S T U D Y R E S U L T S
I N S U R E M A R K E T S -P L A N N I N G C O O R D I N A T I O N
P R O V I D E C O M P A R A B L E T R E A T M E N T F O R N T A s
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• Please visit our site at www.cleanenergytransmission.org
• Follow us on Twitter @clean_energy_grid
• Join us for future webinars and events, and feel to reach out to us for any transmission-related questions.
THANK YOU FOR JOINING US
Questions?