America’s biggest grid operator, named simply PJM, has proposed some serious revisions to how much it will pay power generators to be there when needed. The good news is that renewables will be downgraded. The bad news is that what PJM proposes is nowhere near what we need to prevent catastrophic blackouts.
We are talking about what is called PJM’s “capacity market”. Basically, it means that power producers first offer to guarantee to make their generating capacity available when needed. Then prices are somehow agreed to, and capacity contracts are made between PJM and the willing producers.
The whole process is extremely complex, and I do not pretend to understand the inner workings. The proposed reforms alone take about two thousand pages, all written in the abstruse jargon of guaranteed power at a future time. But the gist is clear enough.
Before looking at the reforms, it is important to know what is driving them, which is the so-called energy transition. Bear in mind that power generation is regulated by the States, not the Feds, and a PJM is sort of a Fed. Their reforms have to be approved by the Federal Energy Regulatory Commission (FERC).
Reliable generators are being shut down at a rapid rate, especially the coal-fired ones, often due to state policy or mandate. Even when the shutdown is a utility decision, it still must be approved by the state regulatory authority as in the public interest.
It has become clear that shutting down all this reliable generation and trying to replace it with renewables leads to severe reliability problems. Numerous warnings have been issued by FERC and the grid operators, including PJM. The catastrophic Texas blackouts, followed by a reliability emergency at PJM at Christmas 2023, led to the present rushed reforms.
The core of the reforms is about an extremely technical computation called the “Effective Load-Carrying Capability”, or simply ELCC.
Here is a simple explanation of ELCC: “Adding up the capacity available to meet resource adequacy needs is significantly more complex for a power system with a high proportion of non-firm resources. Planners must have a thorough understanding of the system conditions that can lead to loss of load, and the statistically-likely performance of variable resources such as wind and solar during those events. Characterizing the severity and frequency of events that may occur only once every several years requires tremendous amounts of data and computing power. This complexity is compounded by the fact that non-firm resources have interactive effects — solar, wind and storage resources often complement each other, meaning that a system with all three resources present will be more reliable than a system with just one or two.”
“To make sense of these dynamics, the industry is increasingly turning to Effective Load-Carrying Capability (“ELCC”) as the preferred method of measuring the capacity contribution of non-firm resources. Born out of the tradition of “loss-of-load-probability” modeling that system planners have long utilized to determine the planning reserve margin needed to ensure reliable electric service, ELCC is a natural extension of those methods to the problem of non-firm resources.”
In the PJM capacity market, ELCC is used to decide how much capacity is needed overall and then to assign a reliability value to every proposed capacity. It also helps determine the price PJM will pay for that capacity. Roughly half of the two thousand pages of proposed reforms have to do with ELCC. PJM wants to switch from “Average ELCC” to “Marginal ELCC”, but I am not going to try to explain the difference.
The good news is that Marginal ELCC values increasing renewables a lot less than Average ELCC. This makes sense as adding more solar does not increase reliability at night, and adding wind does not increase reliability when it is calm.
The bad news is that the PJM capacity market is unlikely to prevent catastrophic blackouts. There are several reasons for this.
To begin with, ELCC depends on accurately estimating the probability of failure to perform for every generator in the system. This is simply impossible. We are not dealing with a long history of stable technologies that can be assessed statistically. We are dealing with rapidly changing technologies, the performance characteristics of which are unknown.
Nor is the failure to perform a random variable for each generator. Failure is often due to extreme weather occurring on a scare far greater than the PJM territory, so generator unreliability is highly correlated across all of a given type. Note this is true for supposedly reliable generators as well. Both Texas and PJM saw widespread failure of gas-fired generation due to rapidly occurring extreme cold messing up the gas supply system.
Moreover, PJM is just buying capacity for a short period of a few years out. This kind of passing payment cannot bring forth what is really needed, which is a bunch of new, reliable power plants. We are rapidly approaching the point where there will be no reliable capacity for PJM to buy.
The States and Utilities are creating this growing threat of catastrophic blackouts, so only they can solve it. PJM’s efforts are commendable, but they are really just fiddling with a sickening grid.
Dr. David Wojick is an independent policy analyst and senior advisor to CFACT. As a civil engineer with a Ph.D. in logic and analytic philosophy of science, he brings a unique perspective to complex policy issues. His specializes in science and technology intensive issues, especially in energy and environment. As a cognitive scientist he also does basic research on the structure and dynamics of complex issues and reasoning. This research informs his policy analyses. He has written hundreds of analytical articles. Many recent examples can be found at https://www.cfact.org/author/dwojick/ Often working as a consultant on understanding complex issues, Dr. Wojick’s numerous clients have included think tanks, trade associations, businesses and government agencies. Examples range from CFACT to the Chief of Naval Research and the Energy Department’s Office of Science. He has served on the faculty of Carnegie Mellon University and the staff of the Naval Research Laboratory. He is available for confidential consulting, research and writing.
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2000 pages to agree to a price for electricity ? I would think that is about 1900 pages too many to actually provide clarity as to who pays for what, when, and how much.
Yes 2000 pages is certainly too much to provide clarity and understanding but it pales into insignificance compared to the UK’s more than 10,000 pages of reports, consultations and white papers on tackling ‘climate change’. Nobody can possibly understand the ramifications of all that verbiage – but it’s all going to work out fine! 🙂
Christ! Leftist politicians and bureaucrats are just politically complicating an inherently complex issue.
Some methods need to be developed to limit the penetration of unreliable, non-synchronous ruinables into any given system. I understand the limits are, variously, 25% to 50% penetration of ruinables depending on a particular system’s characteristics.
Dave, I agree with what you are saying but the problem with that approach is that it’s an effort to determine the maximum amount of solar and wind, and the percentage of each, on any given grid without a loss of reliability. An alternative approach is, if we correctly assume that CO2 is not the climate control knob, the question becomes what is the most cost effective solar and wind grid penetration? My answer to that is any combination of wind and solar up to 5% grid penetration is harmless,10% is a nuisance, 15% is grid destabilizing and economically wasteful, 20% is reliability and economically destructive, and 25% is insane (see California, Texas, and Germany).
“Basically, it means that power producers first offer to guarantee to make their generating capacity available when needed.”. It all depends what they mean by capacity. A solar panel’s stated capacity is its maximum possible output in perfect conditions. If PJM are clever, they will use this definition and accept nothing less than full capacity at times of peak demand. IOW the solar generators will have to buy in from eg. gas or coal generators to cover shortfall and would end up selling nothing at all. That’s because the buy-in price could be carefully calculated to make them uncompetitive with direct sale of gas or coal generation. The really interesting outcome would be a fall in consumer prices – the more it happens the lower the gas or coal generation price goes.
I doubt PJM are that clever. I really hope they prove me wrong.
That wás very clever. So we will shut down that loophole immediately!
This is why we have to keep close tabs on you internet activists… you let us know where to put the next bomb under society’s backside.
Signed: Big Brother
‘I doubt PJM are that clever. I really hope they prove me wrong.‘
They’re not stupid. Conversely, many of the public utility commissions that oversee the PJM member utilities, are.
My impression from reading here and there is that solar nameplate capacity, even under the best local weather conditions, can not be had north of about 40 degrees latitude in the northern hemisphere or the relevant latitude in the southern hemisphere, and then only in the summer months. The further from the equator, the lower the maximum capacity per unit of time although there is an increase in the potential duration of time when the panels will be receiving sunlight.
Two possible and sensible ways of dealing with intermittency.
One, go out for tender for delivery of a service which is reliable and consistent – using the usual acceptable performance of coal or gas plants as the parameters. The bidders are obliged to commit to that.
This is what appears to have doomed the Scandinavian venture whose failure has recently been in the news. The bidder did so commit, and then found they could not deliver. Or only at costs which would bankrupt them.
Two, as here if I understand it, rate every service bid with an index of reliability and consistency, and discount the price paid.
They are just two different ways of ensuring that all the costs are recognized. Either the supplier makes the service they are offering usable, by using a technology or mix of technologies which delivers to normal standards. Or the buyer only pays what a raw intermittent service is worth to them.
On the second, I don’t think that in a free market anyone would buy a service with the level of unreliability and intermittency of raw wind. All you have to do is look here:
http://www.gridwatch.co.uk/wind
What would you pay for this? After you get through installing transmission to move this unreliable supply to where you can use it, then installing and running the open cycle gas generation that is required to make it usable at all, I doubt its worth anything to a network operator.
The wind may be free. But the installation of the turbines isn’t. and its astronomically expensive to use it. Its not surprising that wind operators are defaulting and walking one after the other, and that the recent UK auctions had no bids. The technology is not fit for purpose in this application. Its too expensive to start with, and what it delivers is not usable without huge additional costs,
From an internet search on “pjm acronym electric power”:
After Baltimore Gas and Electric Company and General Public Utilities joined in 1956, the pool was renamed the Pennsylvania-New Jersey-Maryland Interconnection, or PJM.
Right but now they are in 13 states, with federal authority. They peak around 150,000 MW.
Michael, as you state, …Or the buyer only pays what a raw intermittent service is worth to them….on the second, I don’t think that in a free market anyone would buy a service with the level of unreliability and intermittency of raw wind….
The political reality is legislatures and the regulators they control will continue to support wind and solar (jobs/political campaign contributions), but as the unreliable and duplicative cost continues to increase, the support will gradually decrease. The problem is those $100’s of billions spend on nearly worthless wind and solar will continue to poison the grid for decades. The logical option, “pays what a raw intermittent service is worth’ is not an option.
Ten years from now most States will pass legislation that after some future date, (2050?) all wind and solar mandates, tax credits, curtailment payments and more will not apply. The wind and solar nightmare will still be hanging around for a long, long time (see ethanol, economically and environmentally destructive but new construction is “limited”).
it’s all just become some crazy school-playground game, where the rules of engagement and who is allowed to play become ever more convoluted & petty
But they’re not children (outwardly) so who’s paying for this impenetrable bafflegab and endless promotions of virtues & caring?
While legions other self promoters and paragons of virtue and care are required to decode this garbage and make sense of it, at what cost?
Yet if they ever do decode the thing, the entire document will be ‘revised’ to make even more impenetrable and it all goes back to square one.
Again, parasites are killing the host
And thus the 24 kw natural gas standby generator coming at my house. My hold up is the electrical utility company getting out here to convert my service from 100 W to 200 W and run the incoming power underground. they start on framing my additions tomorrow and that goes quickly. As soon as that is done and the 200 amp service conversion is done I can get the generator installed.
I want it in operations before real winter comes and after two months of no results and no response I am, against my better judgement, just about to the point of talking to some friends and seeing if I can get some heat put on the utility engineer.
So what’s your plan for dealing with state-mandated collapse of of natural gas utilities?
You can’t expect the gas company to keep serving as fossil fuel bans on new construction spread and new penalties are dreamt to meet the activist/alarmist demands…
200 amp service. correct.
Hopefully, you mean ‘amps’. 😀
Good luck with the projects. We installed a 20kW Kohler (propane) several years ago because of dicey utility service. Ironically, the utility has done a lot of tree work and has become fairly reliable ever since.
After 36 years, we just installed a 12kW Kohler (propane) for 2 major reasons:
GMP has also discovered microgrids, which look like another way to justify less power line maintenance as well as meet state net zero requirements (big in VT) and generally suck up to the greenies while pulling the wool over the eyes of their customers.
Win Win!
Good thing you are not in California where the standby generator is illegal, but the State will help subsidize battery storage, provided you’re not grandfathered for the solar credit of $0.30 kwh for your rooftop solar electrons when the FMV is closer to $0.03/kwh.
Explainaing the fatal result of driving out coal and gas to go green with wind and solar is as simple as ABC.
A: Input to the grid must continuously match the demand.
B: The continuity of wind and solar input is broken when there is little or no wind overnight.
C: At present there is no feasible or affordable large-scale storage to bridge the gaps.
Consequently it is fatal to depend heavily on wind and solar power unless there is reliable power available in reserve, or power can be sourced from some other grid.
Wind and solar can displace coal but they can’t replace it.
https://www.flickerpower.com/index.php/search/categories/renewables/21-7-intermittent-solar-and-wind-power-can-displace-coal-but-cannot-replace-it
Look out for the tipping point when the capacity of reliable power falls below the points of peak demand, because then there will be a crisis whenever the wind is low, especially overnight.
https://newcatallaxy.blog/2023/07/11/approaching-the-tipping-point/
What happens now of course, and will happen in future, is that Open Cycle gas generation is kicked in to fill in the drop.
It is possible, at vast expense, to have a national grid that is nominally powered by wind. The first thing you do is put in enough wind to make it plausible that is what you are doing. Its going to have to be at least 4 x the regular demand. In the UK, for instance, its going to have to be 150-200GW, to look plausibly like meeting demand which is around 40GW.
Then, you have also to install enough gas, most of it Open Cycle, because you need rapid start, to cover a big chunk of that 40GW.
The final step is the critical one. You then put out lots of press briefings, which are picked up and run with by the Guardian, BBC, Washington Post, NY Times etc. These make no mention of the gas plant, and they also avoid talking in GW. Instead they make the usual claims, like yesterday 86.2% of UK power was generated from wind. Or, wind is now powering X million homes. Never permit any proper analysis to be published.
You can see the real situation here:
http://www.gridwatch.co.uk
But remember when looking at the wind contributions that you have to allow for the fact that there are compulsory purchases of wind, and also constraint payments to cut off the peak. The charts give a rough idea, but its not rigorous.
Rafe, you state, C: At present there is no feasible or affordable large-scale storage to bridge the gaps.
and there never will be because the enclosure, switch gear overcurrent protection, fire suppression and more cost is $200/kwh, battery not included. Therefore, if the batteries were free storage for more than four (4) hours is still more than five (5) times too expensive. Storage cost for a week of cloudy and calm is off the chart. Pumped storage requires flooding a valley and Alarmist hate reservoirs almost as much as they hate oil and gas.
Story Tip.
India To Increase Coal Production By 60% | NOT A LOT OF PEOPLE KNOW THAT (wordpress.com)
When are developed countries going to wake up to the fact they are destroying themselves for absolutely no reason !!
NOTHING they do will have the slightest effect on reducing global CO2 emissions.
Nice that the developed nations are slashing coal use- that keeps the price down so India and China and Africa, et. al. can get it cheap and lots of it.
Yeah, great idea.
Problem is, the mining rights already belong to the same people closing down civilisation. So even Africa has to beg and borrow their own resources, which then gets stolen by international gangs, anyway…
There is no stopping a psychopath, once he hears the call to do God’s Work. Apparently God needs to get rid of 7 billion of us.
While we’re at it- going back to the stone age- let’s bring back the paleolithic megafauna with genetic engineering- the final solution. /sarc
yabba dabba doo
An obvious answer is to have a standard power demand curve for each day of the week. And then scale that to match the typical seasonal loads, (learnt from previous years). Add a small percentage annually for growth. And to really make the “standard’ demand curve hit closer to home, have it adjusted for daily weather effects, (again, modeled on previous, similar events from the recent past).
Then, with this demand curve, being a FORECAST, have all suppliers bid to supply that WHOLE day. A winning bid may get to supply 5% of the power for every minute of the day. Bids would not be accepted for just the 3 hours around midday.
To be clear. Bids are entered for the WHOLE day, not 5 minute chunks.
The outcome would be ….Solar would have to buy or lease some proper power production facility to allow for the overnight supply, else they can’t bid. Their costs would then represent the true cost of their production, whether it be supplemented by battery or other.
Wind could still bid but they would have to be conservative in their estimates or like solar, would have to get another generator or storage to join them. Again, the true cost of the power would be presented.
An on demand generator would at least have a chance to run and use it’s competitive advantage, (reliability).
And now for the bleeding obvious, there still needs to be generators on line for frequency control, you pay a premium for this float, just like now. This float also picks up the minor changes from the forecast to reality.
I didn’t even go past a page on this one…. What the hell are the other 2000 odd pages meant to confer anyway?
You are trying to make a complicated thing easier, I applaud you. Now start over, scrap all subsidies, and see how the whole business suddenly starts running along logical lines at minimal cost.
The devil eats taxes, and defecates subsidies.
I believe the word used was ‘bafflegab’!
Are you sure those pages aren’t just blank with a big question mark on them? 🙂
Yes, that’s what I was thinking. The price charged by the other generator would necessarily be a lot higher than the other generator would quote for direct supply, and so as you say the true cost would be represented. If there had been a level playing field from the start we wouldn’t be in this mess.
Good news for Kohler and Generac. Their home and business backup generators will be flying off the shelves.
Clearly, one would be forgiven for thinking this an engineering problem. We, in fact, are mal-investing resources to solve a problem created by a solution in search of a problem. Stupefying.
As usual, I enjoy the image at the top. Still trying to make sense of it. No doubt Van Gogh would love it. It’s time for the Museum of Modern Art in NYC to put on a exhibit of AI generated art.
Oh ye gods, please no! The world has enough poorly executed “art” pasted together from popular works from our youth. Pictures, music, movies… is anyone original allowed to publish these days?
From what I’ve seen in MOMA, most modern art by real humans sucks. That is, after WWII. I like very much the earlier modern art. Even that museum sucks. They rebuilt it not long ago- mostly glass and steel. I much prefer the MET.
This is what happens when you allow bean counters to make engineering decisions. This trend started with the Privatisation scam, and it WILL eventually destroy modern society.
Gads, man, these sods think maintenance is “not core business”. Maybe their load prediction skills will be better honed in these new Magical Lessons classes the universities are starting up now. Or maybe we should all get into Archetypal Cosmology, so we will know when the universe sends power blackout vibes?
Sods!
When one of the top news posts on PJM’s home page is how friendly the organization is to adoptive families, one has to wonder where their priorities are in their business.
In the absence of empirical evidence proving the case against CO2 (there is none!), nor is CO2 a pollutant, or the primary driver of so claimed ‘global warming’, then that’s needed is a sensible Energy Policy. One that’s fair to all; is market driven; works from the consumers interests back, NOT from the energy industry’s interests forward that;
• Is technology agnostic (fears & favors none);
• Removes current anti-competitive subsidies favoring the unreliables – a level playing field for ALL;
• Requires industry to comply with clearly defined QOS (Quality of Service) standards of reliability & availability (i.e.; 99.98% reliability);
• Invites industry to commit by way of auction (a day, week or a month in advance of the offered opportunity) to provide reliable 24/7, base load power at their best competitive price(s);
• Imposes SUBSTANTIAL financial penalties upon power generators for any failure to deliver in accord with mandatory QOS obligations (Force Majeure notwithstanding eg earth quakes, floods, bushfires, tornados etc);
• Requires substantial bond to restore the environment (i.e.; recycle aged solar-PV’s & wind turbine blades etc as is common place in the coal mining industry);
• Repeals any anti-competitive CO2 legislation (like subsidies in favor of the unreliables).
Thus, let market forces prevail on a level playing field.
Presumably, the Greens would invest in their perceived market opportunities associated with the ‘unreliables’ plus maybe some ‘firming’ added (by way of batteries, Pumped Hydro or what-ever takes their fancy but at their cost) to ensure their QOS reliability factor.
Whereas others (like me) might be more circumspect. Inclined to invest in proven, reliable, base-load fossil fuel technologies in the short term. Longer term, in nuclear based technology, assuming it’s cost competitive V’s competing technologies.
Easy.
You guys are all missing the point of this … follow the money.
This is about maximizing the sale of all the power my generator is capable of producing—but not producing. I’ve got 50 MW capability, but not spinning because solar is producing and solar has priority buy. This is a scheme where I get to sell power I could be producing.
“This kind of passing payment cannot bring forth what is really needed, which is a bunch of new, reliable power plants.”
But no new “power plants” are being built, anywhere in the US. Nothing is being done but adding more pinwheels and sun-plates.
Started in 1927, the pool was renamed the Pennsylvania-New Jersey-Maryland Interconnection (PJM) in 1956.
It smells of “smoke and mirrors” to give regulators the impression that everything is under control. Once the grid breakdown occurs there will be a mad scramble to point the finger of blame.
PJM’s 2000 page effort to do the impossible looks like nothing more that an effort to avoid future renewables induced blackout liability. Won’t work.
Oh no they don’t. I can’t say that I have looked at nearly enough data to make recommendations, but I have looked at enough to see that the relationship between wind and solar is variable — sometimes correlated positively and sometimes negatively. It varies by time of year, region, time of day, passage of weather systems, and so on.
They could solve the problem with storage, but even the whimpiest of estimates needed are far beyond affordable. We also appear to be gravitating toward the use of natural gas everywhere for everything in contradiction to the 1970s lesson learned about not discriminating against particular sources of energy. Letting a variety of sources supply where it makes sense leads to more energy security and lower costs.
“Green energy”
https://twitter.com/i/status/1723974470526812323
“The bad news is that what PJM proposes is nowhere near what we need to prevent catastrophic blackouts.”
I would expect such a bold statement would be followed by examples on the PJM.
Of course I am not surprised that no examples are provided because for the 50 years I have been watching there have been no such failures.
Good job PJM, It sure looks like they know what they are doing.
Based on my observation other grid operators, I am not seeing a problem.
Remove wind and solar from the grid and all of this becomes much much easier.
True but the public wants wind and solar.
No they don’t, they have been told they want wind and solar. The people who told them that are liars and cheats.