How PJM can get the power that it needs — and fast

Yahoo

18-02-2025

PJM Interconnection, the organization that manages the transmission grid delivering electricity to about 65 million people from the mid-Atlantic coast to the Great Lakes, badly needs more power. In fact, its inability to connect projects languishing in its interconnection queues — most of them solar, wind, and batteries ready to replace closing coal-fired power plants — has spiked the cost of power, is threatening state clean power goals, and may put grid reliability at risk before decade's end.
Last week, PJM won approval from the Federal Energy Regulatory Commission for two dramatically different approaches to solving these problems. But clean energy companies and advocates say one of the plans is unfair and won't work — and they're hoping the grid operator will focus on the cleaner, faster, and more realistic alternatives at hand.
The plan critics take issue with, known as the Reliability Resource Initiative, allows PJM to fast-track some 'dispatchable' generation resources — most likely, fossil gas–fired power plants — ahead of all the other projects that have been waiting for years to get connected, the vast majority of which are wind, solar, and batteries.
Power plant owners, utilities, and state regulators support the RRI. But opponents say it runs counter to fair and open grid access and market competition rules, could complicate already-clogged interconnection processes, and will likely fail to deliver the fast grid relief PJM is looking for.
At a FERC meeting last week, the RRI proposal passed by a 3-1 vote, with the fifth commissioner, Lindsay See, a Republican, abstaining. But only Mark Christie, a Republican who was named FERC chair by the Trump administration last month, voted in support of the plan without expressing reservations.
Willie Phillips and David Rosner, the two Democrats who voted in favor of RRI, said in a concurrence to the decision that their approval was a 'one-time emergency measure' and that the plan is 'not a substitute for a well-functioning interconnection process.' Judy Chang, a Democrat who voted against the plan, wrote in her dissenting statement that RRI 'presents a risk of the worst of both worlds: It compromises the Commission's open access principles with no guarantee it will resolve PJM's reliability issue.'
One problem with RRI, Chang wrote, is that it seeks to fast-track the kind of power plants that are the hardest to build quickly: 'large generators, which are the most challenging to develop, acquire the necessary environmental permits, and obtain adequate material supplies and labor for construction.'
Another problem is that PJM's methodology for choosing which projects get fast-tracked primarily rewards large ones, rather than prioritizing criteria like whether they can be brought online before 2030 or built at sites with existing 'headroom' on PJM's grid, even though those are 'arguably the two most critical factors to meeting its identified reliability needs,' Chang wrote.
Critics have expressed similar concerns since PJM launched the RRI plan in October. The grid operator predicted that the plan could spur 10 gigawatts of new power plants by 2028. But industry observers say it's highly unlikely that many gas-fired power plants could be built or connected that quickly.
Just getting the new gas turbines needed for these power plants can take four to five years given current order backlogs, according to industry experts. Last month, renewable energy developer NextEra Energy announced plans to build gas power plants with GE Vernova. But CEO John Ketchum noted in an earnings call that gas-fired generation projects not already well along in the procurement and construction process 'won't be available at scale until 2030 and then only in certain pockets of the U.S.'
Nor are large power plants likely to fit easily onto a PJM grid that's already too congested to connect most projects, at least not without significant and costly grid upgrades, said Caitlin Marquis, managing director at clean energy trade group Advanced Energy United.
Letting up to 50 projects leap to the front of the line 'could raise interconnection upgrade costs' for the many other projects that have been waiting to get onto the grid, she said.
Even the Electric Power Supply Association, a trade group representing companies that own and develop gas-fired power plants, has voiced reservations about the RRI plan. 'All resources play a role in the evolving energy landscape; this limited tool is only necessary to address short-term interconnection queue bottlenecks and the current supply crunch,' Todd Snitchler, the group's president and CEO, said in a statement last week. 'We anticipate that PJM's queue reform process will resolve these challenges, making such measures unnecessary in the future.'
All of these drawbacks make the RRI plan a nonstarter, critics say. But there are many other options that PJM could pursue, according to Marquis.
'Those solutions that don't upend market expectations are the pathway you should take, rather than turning to a solution that's going to have a lot of disruption and market risk and still yield uncertain outcomes,' she said.
The second PJM plan approved by FERC last week, known as Surplus Interconnection Service, is one such option. In simple terms, it lays out rules for existing projects to add new resources — like batteries to wind and solar farms — to provide more power when the grid needs it most.
That proposal won broad support from groups that have fought over RRI, including clean energy advocates and fossil fuel power plant owners who are usually at odds. The new plan, clean energy advocates point out, is much improved from PJM's previous SIS regime.
'In the past, the surplus interconnection rules were very restrictive,' said Katie Siegner, a manager in the carbon-free electricity practice at think tank RMI. 'Now it's been opened up to be applicable to a much bigger set of resources.' For example, 'we've heard from independent power providers that adding storage to existing or soon-to-be-operating renewables is now a real use case.'
In fact, an RMI analysis submitted as part of a FERC filing from environmental groups Sierra Club and Appalachian Voices calculated that by 2030, PJM projects using SIS could add between 5.3 GW and 13.2 GW of 'unforced capacity' — a term for the amount of power available during times of peak grid demand that drive PJM's resource-adequacy needs.
That's not the only way PJM can unleash more power on the grid, Siegner said. Beyond SIS, PJM has put forward a bevy of ideas to deal with what it has described as a looming grid reliability crisis. Another proposal that's won ample stakeholder support and is now awaiting FERC approval would let newly built resources more quickly reuse the grid connections left open at power plants, most of them coal-fired, that are now closing across the region.
According to RMI's analysis, this 'generator replacement interconnection' option could add from 3.3 GW to 10.2 GW of unforced capacity to PJM's grid by 2030. That's not just a neat way to replace dirty generation with much cleaner resources — RMI has estimated that the technique could enable up to 250 GW of clean energy across the country by 2032. It would also help resolve PJM's core challenge of replacing power plants closing under state climate mandates or economic pressures.
Projects in Massachusetts, Minnesota, and North Carolina have all installed batteries that use the grid connections at shuttered coal-fired power plants. Environmental groups and Maryland state officials attempted to get PJM to consider such a plan to avoid paying a set of coal plants in Maryland to stay open past their planned closure dates, only to founder on PJM's lack of a workable set of rules to allow this approach to move forward.
PJM won't be trying something new if it pursues these pathways, Siegner added. The Midcontinent Independent System Operator and Southwest Power Pool, two grid operators that together manage grids covering or touching 18 states, have added nearly 7 GW of capacity using their own versions of surplus interconnection service, and a combined 13.3 GW of capacity through generator replacement, according to RMI's analysis.
Finally, if PJM simply completes and executes long-promised reforms to its notoriously slow and backlogged process for managing its interconnection queue, that could make a big dent in its generation deficit, Siegner said. What's more, PJM and all other U.S. grid operators are under FERC mandate to undertake interconnection reforms that should drive further improvements.
All of these changes will 'allow resources to be fairly evaluated and interconnected faster,' she said. Taken together, they can more than make up the capacity shortfall PJM is forecasting for 2030 and that is spurring its RRI proposal.
Backers of fast-tracking gas-fired power plants aren't against these other reforms. As Electric Power Supply Association's Snitchler said in last week's statement, 'What matters most and what we hope to see going forward is a fair, efficient interconnection process that gives developers reasonable certainty while ensuring the grid has the power it needs—now and in the future.'
At the same time, the conflicts that have emerged over PJM's menu of plans to solve its grid challenges match up with a broader political division between fossil fuel supporters and clean energy groups.
Last month, Republicans in Congress introduced bills that would require FERC to quickly review and decide on grid operator proposals that, like PJM's RRI plan, push certain 'dispatchable' power plants ahead of other projects in interconnection queues. The Electric Power Supply Association supports the legislation, which was introduced by lawmakers representing Ohio, North Dakota, and Indiana, three Republican-controlled states with policies that support fossil-fuel power plants.
At the same time, major grid failures during winter storms over the past four years have revealed that gas-fired power plants aren't always able to provide the electricity that plans like these assume they will, said Sarah Toth Kotwis, a senior associate on the markets and grids team at RMI's carbon-free electricity program.
PJM's RRI proposal presumes that 'larger resources are more likely to contribute to reliability. But in fact, we've seen time and time again that just because a resource is dispatchable doesn't mean it's reliable.'
Such proposals will likely face legal challenges. FERC's decision last week rejected complaints by clean energy groups that PJM's RRI plan violates legal precedent over making changes to existing rules and rates. But policies that privilege some types of power plants over others in the competitive markets managed by grid operators could certainly be seen as a violation of the 'open access' principle that's been core to federal electricity policy for decades, according to Rob Gramlich, president of consultancy Grid Strategies who previously held senior positions at FERC.
'For those who think they have an easy one-time fix or a way to get a quick solution here, maybe they've not been in court proceedings very often. But those don't get resolved quickly, especially when you're going after the core principle of FERC and Federal Power Act policy,' Gramlich said during a December webinar.
Gramlich didn't dismiss the challenges that PJM and the country at large face in expanding power supply to serve data centers, factories, electric vehicles, and other drivers of growing electricity demand. But 'I would suggest people might look for other ways to speed things up,' he said.