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PJM's long-term power demand could be lower than forecast: Platts Analytics

Highlights

Energy efficiency, BTM generation could temper demand

EV charging, electrification boost demand in outer years

New York — S&P Global Platts Analytics expects PJM Interconnection power demand to materialize at lower levels than forecast in the grid operator's recently released long-term load forecast due to increases in energy efficiency and behind-the-meter generation that could offset end-use consumption.

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"Platts Analytics remains significantly more bearish on outlooks for load," driven by expectations for growth in energy efficiency and BTM generation countering end-use demand, the analysts said in a Jan. 7 research note.

The PJM power demand report includes long-term forecasts of peak loads, net energy, load management, distributed solar generation, and plug-in electric vehicles for each PJM zone, region, locational deliverability area, and the total Regional Transmission Organization.

Platts Analytics' weather-adjusted load estimates demonstrate ongoing declines in PJM average demand over the past five years, even before the effects of the coronavirus pandemic in 2020.

"While our forecast certainly demonstrates downside to various load forecasts across a variety of regions, PJM's load forecast has repeatedly exhibited a propensity to overshoot realized loads with an outlook for indefinite load growth," the analysts said.

Although energy efficiency and BTM generation are expected to overwhelm other contributing factors to load through 2030, the Platts Analytics' forecast for both electric vehicle charging demand and electrification drive increases in the latter half of their 30-year forecast, according to the research note.

Total demand expectations

"While on an annualized basis the rate of growth is modestly lower (0.49% in 2021 vs. 0.61% in 2020), PJM RTO annual demand is substantially lower (5%) by 2035, due to a lower starting point in 2020," Platts Analytics said.

While the 2020 load forecast showed a rapid recovery in early years to match earlier trajectories for loads, the 2021 load forecast averages 4.5 aGW lower over the last five years of the forecast period, the analysts said.

Nevertheless, PJM's 2021 load forecast features accelerated load growth (0.97% annualized growth through 2025 vs. 0.88% through the same period in the 2020 Forecast) due to recovery from impacts associated with the coronavirus pandemic (both behavioral and economic) to demand, Platts Analytics said.

PJM summer peak load growth is projected to average 0.3%/year over the next 10 years, and 0.2%/year over the next 15 years, according to grid operator's report.

The PJM summer peak is forecast to be 153.8 GW in 2031, a 10-year increase of 4.5 GW, and to reach 154.7 GW in 2036, which is a 15-year increase of 5.5 GW. The RTO's record high summer peak was 165.6 GW set in 2006.

Winter peak load growth for PJM is projected to average 0.3%/year over the next 10-year period, and 0.2%/year over the next 15 years. The PJM winter peak load in 2030/31 is forecast to be 135.6 GW, a 10-year increase of 3.5 GW, and reach 136.5 GW in 2035/36, a 15-year increase of 4.4 GW, PJM said. The record high winter peak was 143.3 GW set during the polar vortex of 2015.

Regional adjustments

The forecasts for some zones have been adjusted to account for "large, unanticipated load changes," which include the APS zone being adjusted to account for accelerating load related to gas processing plants, the PJM report said.

In addition to DOM zone adjustments for "substantial on‐going growth in data center construction," the BGE zone was adjusted to account for the ongoing implementation of a conservation voltage reduction program, and the COMED zone was adjusted to account for implementation of a voltage optimization program, PJM said.