The biggest takeaways from our PJM and ERCOT spring outlook webinars

Tasked with running an effective, futureproof electricity grid, US regional transmission organisations (RTOs) face significant challenges. As the energy transition gathers pace and fossil fuel powered generating capacity is retired, a wealth of new renewables projects must be connected – and the grid upgraded to cope. At the same time, large sections of ageing lines must be replaced. 

Our power and renewables short-term analysts recently presented seasonal outlook webinars providing forward-looking insights for two key RTOs: PJM and ERCOT.  

Read on for a quick overview of the highlights from these webinars, and fill out the form for complimentary access to the full slide decks and webinar recordings to learn more. 

PJM 

Generation additions and outages 

PJM operates in 13 states in the northeast US as well as the District of Columbia. A key focus for the RTO is to add more renewable energy to its generating stack; nearly all (1.53 GW) of the 1.55 GW of new capacity due to be added in Spring 2024 will come from solar.  

The five largest capacity additions in order of size are: Acciona Energy USA Global’s AEUG Union Solar facility in Ohio (325 MW); Hecate Energy Highland, also in Ohio (300 MW); Waverly Solar in Virginia (118 MW); Horus West Virginia 1’s Blake Solar plant (96 MW); and Adams Solar in Pennsylvania (80 MW). 

While no deactivations are due this spring, these additions will be offset in the short term by a series of scheduled outages of nuclear generation capacity. Seven different nuclear facilities will be out of action for periods of between 21 and 61 days in Spring 2024. 

Transmission congestion and improvements 

Eight ongoing transmission issues will continue to cause outages and create medium-to-high congestion risks throughout the spring. However, several projects are in progress that will improve the future capacity and reliability of PJM’s transmission network:  

• Lanexa to Northern Neck: The rebuilding of 41 miles of transmission lines to current 230kV standards is expected to triple the section’s summer rating, reducing risk in this area of Virginia 
• Brunot Island: Additional upgrades to the area’s 345kV network identified as part of the retirement of the coal-fired Cheswick Power Station will increase its summer rating by 150MVA 

• Athenia Substation: Replacing the existing 230/138kV Athenia No. 220-1 transformer should improve reliability 
• Cook Road: Construction of a new 230kV station will help alleviate congestion and reduce flows in the area 

Addressing the interconnection backlog 

Currently, PJM has a backlog of over 260 GW of generating capacity waiting for interconnection, of which 94% are renewables projects. However, a dated and inadequate transmission network requires expansions and upgrades before interconnection of these new assets can go ahead. 

As old plants are retired, a potential 21% of current generating capacity will be lost by 2030. At the same time, PJM predicts demand will rise by a steady 1.4% year on year, driven mainly by transport, data centres and overall economic growth. 

Several steps have been put in place with an aim to make the interconnection process more efficient. These include a ‘first ready – first served’ approach; connection feasibility studies; system impact assessments; improved stakeholder communication regarding environmental impacts, project siting and cost allocation; larger study deposits; and updated threshold requirements for interconnection. 

ERCOT 

Generation additions 

The Electricity Reliability Council of Texas (ERCOT) has given Energization Approval to 75 new projects with commercial operation dates (CODs) prior to June 2024, the bulk of which are energy storage. Of these, nine (two solar and seven storage facilities) have yet to receive Synchronization Approval.  

New approvals between November 2023 and January 2024 comprised three new solar projects totalling 870.1 MW, along with 674.9 MW of storage. A total of 25 solar, nine wind and 16 storage facilities had their CODs extended into spring, with a risk of further delays.  

Transmission planning 

ERCOT plans significant increases in transmission project spend over the next three years to strengthen and augment the grid. This year the emphasis will be on 138kV projects, with US$2.9 billion expected to be spent – an increase of US$1.7 billion over 2023. Most of this will be invested in rebuilds, reconstructions and upgrades to existing infrastructure. 

Looking ahead the focus will move to higher voltage transmission, with planned spend on 345kV projects expected to double to US$2.7 billion in 2026. This growth in 345kV projects will be for over 635 miles of new lines to improve interconnection across Texas. 

Policy changes 

Three key policy changes announced over the winter will affect ERCOT’s operations. Firstly, its planned NPRR 1186 rule requiring batteries to maintain a stipulated state of charge (SOC) was rescinded. This had been designed to help ERCOT gather information about battery performance during peak hours. However, there were concerns it would limit energy access, inhibit flexibility and reduce competition. 

Secondly, the Connect the Grid Act was introduced on 14 February 2024. This would require ERCOT to connect to neighbouring grids, allowing excess production from renewables to be sold to other regions and increase the potential for imports into ERCOT, especially when resources are strained during extreme weather events. While it will be cost and planning intensive, by improving energy mixes and accelerating the country’s energy transition the Act is expected to save billions in the long term. 

Finally, ERCOT announced upward revisions to its Energy Emergency Alert (EEA) minimum operating reserve standards. These changes are aimed at ensuring the integrity of the grid as the RTO’s energy mix and load requirements grow and change. 

Green hydrogen 

Nearly 40% of generation in Texas comes from wind and solar, and capacity is expected to double to over 100 GW by 2035. Curtailment is a significant issue, creating a need for larger long-term storage solutions. Green hydrogen is a potential answer as excess renewable generation can be diverted to creating this energy source instead of being curtailed.  

Dubbed Hydrogen City, the world’s largest green hydrogen production and storage hub is currently under construction in the Corpus Christi area. Powered by 60 GW of behind the meter solar and wind power, it will also draw from the ERCOT grid when excess is available. Using 50 caverns within the Piedras Pintas salt dome, it will store up to 6 TWh of energy. 

Learn more 

Don’t forget to fill in the form at the top of the page to get complimentary access to the slide decks and webinar recordings, which explore the above topics in more detail. They also include reviews of the winter period and outlooks for spring weather, demand, generation, congestion and prices.