The PJM Interconnection LLC continues to deal with a backlog of renewable resources clogging up its interconnection queue, a steady pace of fossil fuel retirements and suppressed forward capacity prices.
Developers plan to add more than 11 GW of capacity in 2023 across the region, which includes all or
Among the plants slated for retirement this year is Energy Harbor Corp.'s 1,300-MW Pleasants plant in West Virginia, where state officials are considering ways to keep the facility in operation beyond May. Plants anticipated to come into service this year include the 1,875-MW Guernsey Power Station in Guernsey County, Ohio, owned by independent power producers Caithness Energy LLC and Apex Power Group Inc., and the 1,250-MW CPV Three Rivers Energy Center in Grundy County, Ill., operated by Competitive Power Ventures Inc.
In its most recent Regional Transmission Expansion Plan, PJM noted that solar made up 66% of the generation in its interconnection queue as of the end of 2022 at more than 57 GW of planned capacity. That amount equals a nameplate capacity exceeding 93 GW.
There also is more than 14 GW of storage in PJM's queue and more than 6 GW of planned wind capacity. The region's existing installed capacity totals about 185 GW, close to half of which is gas-fired resources.
PJM is working to "clear about 200,000 MW of generation resources, mostly solar, through the queue" over the next four years, according to PJM spokesperson Jeff Shields.
Monitoring Analytics, PJM's independent market monitor, said in its 2022 "State of the Market Report" that it only expects 11,000 MW of solar to "show up as actual capacity," with only 13,000 MW of about 216,000 MW of renewable resources in the queue to come online.
"The success rate for intermittent [resources] is very low, so that massive number in the queue is misleading when you think about what is actually going to come online," Monitoring Analytics President Joe Bowring said during a March 9 conference call with reporters.
Energy transition report
PJM released a report in late February warning about the potential for thermal generation retirements to outpace new resources in an era of increasing electricity demand.
The report, "Energy Transition in PJM: Resource Retirements, Replacements & Risks," is the third phase of a multipart strategy to study the possible impacts of the energy transition on the nation's largest grid. While the first two phases studied energy and ancillary services as well as resource adequacy in 2035 and beyond, this analysis focused on resource adequacy through 2030.
"Simply put, we found that we are reliable for today but we are concerned that generator retirements are currently not being matched by generator replacements enough to meet growing load," Shields said.
Over the next 15 years, PJM anticipates the integration of 105 GW of onshore wind, offshore wind, solar and energy storage. PJM has projected that more than $3 billion in grid improvements will be needed to interconnect these resources.
Price pressure
Declining natural gas prices and the corresponding drop in power prices also add to the pressure facing thermal generation.
According to Monitoring Analytics, 51,757 MW of capacity is at risk of retirement between now and 2030. Of this capacity, 6,628 MW is already planned for retirement, with the market monitor's report highlighting that 23,509 MW is expected to retire for environmental regulatory reasons and 21,621 MW is expected to shut down based on economics.
"The key question is what is the supply going to look like to replace the retiring supply," Bowring said. "Where is the underlying fuel going to come from?"
The market monitor reported that generation from coal-fired units fell 9.1% from 2021 while gas-fired generation increased 6.8% and oil-fired generation jumped 17.8%. Wind and solar increased 16.2% from 2021, supplying 6.8% of PJM's electricity in 2022.
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