PJM is the Regional Transmission Organization (RTO) that coordinates electrical flows involving thirteen states and the District of Columbia. It plays a key role advancing the safety, reliability, and security of the bulk power system for its operating area and well beyond. Depending on your angle of observation, PJM could be the strongest of all the RTO’s serving the North American grid.
PJM has now released its Event Analysis and Recommendations Report for a very close-call experienced in late December last year. It is a well-written, well-organized, very readable report. To some it may sometimes sound a bit defensive, but for what its worth this insider analysis is well-calibrated with the reality I have been able to see from the outside.
Please download the whole report (same link as above) and at least carefully read the Executive Summary. To entice you to do so, here is my translation of some key findings into Supply Chain Resilience lingo:
During Christmas week last year, sufficient upstream capacity existed to fulfill electrical demand. High demand was expected. Downstream demand was even higher than expected: “PJM’s load forecasts for Dec. 23 and Dec. 24 were approximately 8% under the actual peak… rapidly falling temperatures coincided with a holiday weekend that combined to produce unprecedented demand for December.” The consequences of under-estimating demand were amplified by over-estimating how much supply could be converted from capacity to actual flow. “Complications arose on Dec. 24 resulting from the unanticipated failure of generation resources that were called into the operating capacity on that day. At one point, almost a quarter of the generation capacity – 47,000 MW – was on forced outages.” These forced outages were concentrated in the sources of capacity — natural gas generators — that were widely considered the most reliable. “When examined over the entire generation fleet, gas generators accounted for 70% of the outages on Dec. 24. Most outages were caused by equipment failure likely resulting from the extreme cold, though broader issues of gas availability also contributed to the outages.” Pull was at least eight percent higher than expected. Push was about one-quarter less than expected.
Please don’t depend on the reductionism of the paragraph above. Please read the PJM report. This blog has given ongoing attention to last year’s Christmas Eve surprise (e.g., here and here) because 1) grid capacity — especially related to imbalances of growing demand and constrained supply — will continue to trouble electric reliability for years-to-come — and 2) in my experience Supply Chain Resilience is often undermined by insufficient attention to demand dynamics and over-confidence in supply. There is still too much old-fashioned logistics thinking and not yet enough network science thinking and doing.
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July 25 Update: S&P Global reports on the PJM self-study and a July 24 stakeholder review session. Several issues are referenced, including, “The grid operator’s current efforts to overhaul its capacity market add another layer of complexity to addressing winter storm lesson learned because many capacity market considerations overlap with other areas of the market.”