PJM expects to have sufficient capacity to meet 149 GW of summer power demand

PJM Interconnection said May 12 it is prepared to serve a forecasted summer peak power demand of about 149,000 MW and has about 185,000 MW of installed generating capacity available, with sufficient resources in reserve to cover unexpected market changes.

"PJM's expected installed capacity is just over 184,800 MW for this upcoming summer," Todd Bickel, a senior engineer in PJM's transmission operations department, said during a remotely held Operating Committee meeting.

The grid operator has performed reliability studies at higher loads, or demand levels, of more than 157,000 MW that found PJM has sufficient capacity to meet those potentially higher loads, according to a May 11 statement.

"We prepare for summer operations throughout the year, knowing electricity use is normally highest during this season," PJM President and CEO Manu Asthana said in the statement.

Last year's peak summer demand was about 149,000 MW, and while warm ocean waters suggest this year may be slightly warmer than 2021, PJM is expecting demand consistent with last summer. PJM's all-time one-day highest power use of 165,563 MW was recorded in the summer of 2006.

To stay ahead of any "fuel-related supply chain concerns," PJM continues to conduct fuel inventories every two weeks and monitor results for the generation fleet, the statement said, adding that since the winter the grid operator has seen coal inventories begin to replenish.

Coal-fired power generation accounted for 20.5% of the April PJM fuel mix, compared with 18.4% in March, according to ISO data.

"Average power prices at the Western and AEP Dayton hubs remain over $50/MWh for the rest of the year and average $56/MWh and $55/MWh, respectively," S&P Global Commodity Insights analysts said in a recent research note dated April 29.

Forward power prices are creeping higher heading into the higher-demand summer months. PJM West Hub on-peak power for May averaged $81.85/MWh in April trading, 170% higher than year-ago levels. The June contract averaged $89.28/MWh, 194% higher than last year and forward power for July averaged $116.36/MWh, 219% higher than in April 2021, according to Platts M2MS data.

Exports, generation retirements

The Midcontinent Independent System Operator recently said summer power supplies could be about 1,200 MW short, a PJM stakeholder said during the Operating Committee meeting. Since there could be incremental exports from PJM, the stakeholder asked if the grid operator has capacity for those exports and whether there could be a risk of transmission congestion due to those exports.

Bickel said PJM is having internal discussion about that issue and will look to share additional information regarding interchange capacity during tight supply conditions at a future meeting.

PJM also expects there will be about 2,500 MW of generation capacity additions and about 6,000 MW of retirements during the summer, which is larger than usual for that time, but Bickel stressed that the Operations Assessment Task Force 2022 Summer Study did not identify any reliability concerns.

"The main message is the study found no reliability concerns for summer," he said.