PJM Starts Process To Value Price, Fuel Security; Incorporate Into Market
PJM Interconnection announced that, "To address longer-term questions of fuel security, PJM will initiate a process, starting immediately, to analyze fuel security vulnerabilities and establish criteria to assess areas in the PJM system that could face future fuel security issues."
"The criteria will be the means to value and price fuel security. Those criteria could then be incorporated into PJM’s existing market mechanisms to promote competition among different resource types to meet any fuel security needs in a particular location, with reforms to be in place for next year’s capacity auction, if necessary," PJM said
The process will involve three phases:
• "Identify system vulnerabilities and determine attributes such as on-site fuel requirements, dual-fuel capability or others that ensure that peak demands can be met during extreme scenarios."
• "Model those vulnerabilities as constraints in PJM’s capacity market, similar to existing transmission constraints, allowing for proper valuation of needed attributes in the market."
• "PJM will continue to work with the U.S. Department of Homeland Security, the U.S. Department of Energy, the Federal Energy Regulatory Commission, states, stakeholders and others to ensure that the results are consistent with identified security needs in the PJM footprint, including service to key military installations and other identified security concerns."
The intent of the vulnerability assessment is to stress-test the system under various fuel supply disruption scenarios, to better understand potential future reliability concerns. PJM anticipates completing the study within the next six months, and the results will be discussed with PJM stakeholders, including state and federal agencies.