A snow-covered city park at night. Winter.

PJM’s Cold Weather Operations Summary for the period of Jan. 28 to Jan. 31, 2019 includes some very interesting data. The summary gives us a very good look at how the system performed during a significant cold spell in the PJM service territory. There are some lessons for consumers here.

First, let’s do a quick review. PJM is the operator of the electric transmission grid from Chicago to New Jersey. It serves more than 65 million customers in the Northeast and Midwest and has a winter peak of around 150,000 megawatts (MW). The folks at PJM have a very important role in keeping the lights on in the Eastern Interconnect. Consequently, they take their analysis of extreme weather events very seriously.

What we see below in Figure 3 is a great depiction of the level of generation that was offline during the event this January. In total, there was about 21,000 MW of generation that was in a forced outage during this period. This means that this generation could not perform as a result of mechanical failure or lack of fuel supply. This is a very strong relative indicator of the health of the system.

 

Forced Outages: January 30-31 circle graphs
Source: PJM Interconnection

When we contrast this with Figure 4 particularly the performance in the 2014 polar vortex, we see that forced outages have been cut almost in half (from 40,000 MW to 21,000 MW). This is an amazing statistic that speaks to PJM’s increased reliability.

What drove this massive reduction in forced outages? Looking at the pie chart we see that fuel-related outages on the natural-gas side were down by over 200 percent. Coal outages were down by about 80 percent and natural gas plant outages (not fuel-related) were down by around 25 percent.

Forced Outages: 2014 Polar Vortex and 2018 Winter Peak circle graphs
Source: PJM Interconnection

Increased Production, Better Efficiency Minimized Outages

What this data differential implies is that the fuel delivery system for the cold snaps has improved significantly over the past five years and this has led to a more secure grid.

We certainly know that there is a lot more gas being produced in the Marcellus and Utica shales than was being produced in 2014. Also, it’s worth noting these basins are right in the middle of PJM’s footprint.

What is the upshot for the consumer? This robust response to the extreme weather by the energy delivery system (including natural gas production, pipeline, electricity generation and transmission infrastructure) leads us to conclude that a strategy of risk mitigation in extreme periods is still essential.

However, buying that insurance by hedging the whole year through a fixed-price for all hours is even less optimal than it was in 2014.

Author:
As Vice President, Operations at Reliable Power Alternatives Corporation, Mark is responsible for the leadership and management of the RPAC analyst team, as well as the development and execution of all procurement strategies. Mr. Kleinginna has innovated in wholesale and retail energy markets throughout the United States and Canada for the last 25 years.

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