Covid Impacts on PJM Demand

Like everyone else, PJM has had to react to the impacts of Covid-19 on their operations. Their Systems Operations Subcommittee has created an Operations Pandemic Coordination Team to discuss pandemic coordination operations. In addition, weekly on Fridays, PJM is providing status updates for each state and other members/stakeholders.

PJM Planning Committee has also been generating weekly updates on Covid-19 impacts to load. The graph above was taken from the most recent (April 14, 2020) presentation. Here are the findings:

• On weekdays last week (week of 4/6), peak came in on average 8-9% lower (~7500 MW) than anticipated.

• Largest impacts so far were around 10-11% (~9500 MW) on 3/26.

• Energy has been less affected, with average weekday reduction since mid-March being 7%.

• Weekends have been impacted less (~2-4%)

Take-aways: Obviously the change in work patterns via stay-at-home/shelter-in-place orders have impacted demand, but how so? What about the huge increase in unemployment? If the 8% reduction in peak is coincidental load, does that mean the energy footprint of our office employees while at work is higher than when working from home? What about the weekend load, is that all retail closures? Difficult to say at this point what the root cause is with so many variables.

Thoughts on Oil

I recently reread the book “Oil on the Brain: Petroleum’s Long, Strange Trip to Your Tank” by Lisa Margonelli.  Published in 2008, the reader is taken up the American gasoline supply chain - gas station, fuel haulers/wholesalers, refinery, drilling rig, Strategic Petroleum Reserve, NYMEX, Venezuela, Chad, Iran, Nigeria, and China - digging into all the details you may have questioned but never bothered to investigate.  It’s a good read and worth the time if you have it.  Recent comments by President Trump about “keeping” Middle East oil (here, here, and here) piqued my interest and is what motivated me to pick up Lisa’s book again. It got me wondering, whatever happened to oil?

If you recall, in the early 2000s there seemed to be an obsession about peak oil and its subsequent geo-political ramifications (of the 10 documentary films referenced on the ‘Peak Oil’ Wiki page, all were released between 2004 and 2008).  But over the past ten years the oil conversation has vanished from the national conversation (at least in the media).  I did some quick research on the EIA’s site and pulled the following two graphs.

Graph courtesy of the EIA.

Without getting into all the science behind petroleum, we can clearly see between the two graphs that American domestic production has increased (1,829,000 barrels in 2008 and 4,011,000 in 2018) and crude imports have decreased (4,727,000 barrels in 2008 and 3,629,000 barrels in 2018).  The idea of becoming more reliant on foreign oil has at least, for now, been deferred due to expansions in unconventional domestic oil production. With that deferment comes the alleviation of fears and as such, we’ve stopped talking about it.  As a finite natural resource however, we will no doubt pick this conversation up again in the next 10, 20, 30 years or so.

Graph courtesy of the EIA

Back to the book…

In the Iran chapter, the author interviews an unnamed individual who is “on the outs with the regime.”  Through their comments we can infer the individual is informed and had high(er) level access within the government.  She states:

My host worried that as oil fields around the world are depleted, leaving the bulk of supplies in the Middle East, the world’s wrath will turn here.  “Things will start to get crunchy,” he says with a grin.  “If I’m right, finding oil will be an enormous problem for the U.S. suburbia,” he says.  “They are the most important socioeconomic community on this planet, and they are not going to take the destruction of their way of life lying down.  They have an enormous power to change American politics – everything is possible.  Maybe even an end to democracy.  Forget about nuclear weapons and terrorism.  I am very worried about the explosive power of panicked suburbia.”

This statement has stuck with me and was the impetus for writing this post.  Is it not true?  Are American suburbanites the least politically motivated yet most powerful constituency in modern society?  What happens when the level of comfort in suburbia falls?  How does this idea reflect on our policies and governance?

What the PJM Generation Retirement Queue Currently Looks Like

Courtesy of PJM

Two weeks ago I was asked to assist with the startup of one of four converted coal-to-natural gas boilers in Virginia. At the plant, a 150 MWe, eight boiler coal fired cogen plant, half of the boiler burners were being converted to natural gas. What I was hearing for the reasoning behind the investment mirrored what you have read in the news - it was just too expensive to operate while burning coal.

So, like any engineer, it got me thinking about how ubiquitous these conversions or closings actually are. Fortunately, PJM maintains an awesome website with tons of downloadable data. Under the Planning section of their site you can find a list of power plants who have applied for deactivation. I was able to download this data and run some quick analysis. Note that these are planned deactivations and the applications can be withdrawn in the future (so no guarantee of retirement).

In PJM’s retirement queue, as of March 27, 2019, there are 62 plants representing about 12,722 MWs of capacity. Coal fueled plants represent about 40% of the number of plant retirements, and about 55% of the capacity. Note that while only 5 nuclear fueled plants are retiring, they represent another 37% of capacity (92% of capacity retirement is from coal and nuclear)!

Data courtesy of PJM

Data courtesy of pjm

And my next question was, “in what states are the coal and nuclear retirements from?”

Data courtesy of PJM

Data courtesy of pjm

As you can see, plant retirements in Ohio dominate all others. Total plant retirement capacity in Ohio is 5934 MW, or about 46% of all PJM retirements.

Fortunately for us, the Ohio Public Utilities Commission (PUCO) publishes a long-term energy forecast that details current and forecasted energy generation, consumption, and other great info. Turns out that as of December 2018, Ohio gets 45% of it’s electricity generation from coal fired sources, 38% from natural gas, and 15% from nuclear. And in 2016, the non-coincident summer peak load was 31,469 MW. Now, if we figure the PJM plant projected retirement date goes out to 2020/22, that means Ohio could lose 20% of it’s capacity in the next three years!

Graph courtesy of Ohio Public Utilities Commission

And so what is our take-away from this shallow dive? There is an obvious disproportionate amount of coal-fired assets that are currently planned to retire, but there is also a surprisingly large capacity of nuclear planned as well. Those who advocate coal plant retirement as an environmental goal will be pleased, but keep in mind how much emission free nuclear energy is going with it. Also keep in mind that along with these fuel types goes a stable base-load asset with fuel that is cheaply stored on-site.

Another interesting finding was PJM’s Learning Center that discusses (in plain English) what steps are taken when a generating plant retires. See the image/diagram below (from PJM). In short, generator retirements and any required system upgrades to keep the grid running smoothly are included in the PJM Regional Transmission Expansion Planning process.

Explaining Power Plant Retirements in PJM

Per PJM:

PJM Ensures that replacement generation is available to cover lost MWs from the retired plant - this replacement could come from newly built power plants, upgrades to existing plants, or from sources external to PJM. PJM’s capacity market helps secure power supply resources to meet future demand on the grid.

Since transmission lines and distribution lines are all interconnected, upgrades to the system allow electricity to flow on multiple paths and in turn increase the overall flow of electricity.

This means that these kinds of upgrades typically end up bringing more MW (in this example, 1000 MW) onto the system as a whole than the amount of MW lost (800 MW) at a single point, from the retired plant.