PJM Presents Reference Model for Clean Power Plan Analysis

PJM’s Clean Power Plan Analysis Modeling Plan set out the Regional Transmission Organization’s ideas for analyzing economic and reliability impacts of the Clean Power Plan.  At this point the analysis will not be used to inform specific transmission upgrades.  It is instead meant to assess potential economic, operational, resource adequacy, and transmission usage implications of different scenarios. PJM has taken input from the Organization of PJM States, Inc., state agencies, and interested stakeholders into account.

For this analysis, PJM developed a reference model, described in a recent presentation.  PJM describes this scenario as the clearing of multiple markets in PJM to model potential system futures based on policy, regulatory, and market drivers.

The reference model notes that long-term lower gas prices will lead to CO2 emission reductions through retirements and new natural gas units.  The combination of low avoidable costs and high capacity prices will allow natural gas combined cycle units to enter the market.  Lower gas prices will push coal and nuclear generation into the capacity market for cost recovery, with coal resources at greater risks than nuclear from the low gas prices.  PJM observed that wind and solar can continue to grow in spite of low gas prices as long as renewable portfolio standards are in place, and that solar has a higher capacity value than wind, so solar can better take advantage of resource retirements.

PJM’s timeline for its CPP analysis consists of a Long-Term Analysis in April, followed by a Short-Term Analysis that includes a more detailed reliability evaluation, and then a final Compliance Assessment Report in early June.  PJM states that its economic and reliability analyses of the final CPP should be completed in a timely fashion for incorporation into state compliance discussions.  Additional reliability analysis and economic sensitivities and coordination with MISO are also on the horizon.

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