PJM Makes the Case for a Reliable, Carbon-Free Future

The first wave of the clean energy transition focused on developing clean energy technologies and introducing them to the power grid. The wave we’re in now is all about scale, and ensuring that we can implement the policies and market designs to integrate renewables and storage while maintaining reliability. Encouragingly, in a new report, PJM Interconnection, the largest U.S. grid operator, found that even the most ambitious renewable energy goals can be achieved without compromising reliability, provided the right policy frameworks are in place.

In the report, PJM takes a deep dive into how replacing dispatchable thermal power assets with renewable power and battery storage over the next decade will impact its ability to maintain reliability. The report found that a system powered by 93 percent carbon-free electricity could still be reliable by 2035. To put that number in perspective, PJM’s current grid is around 30 percent carbon-free, including nuclear, with only around 5 percent renewables. 

New renewable power is coming online as coal and other fossil fuel generators are being retired, both due to policies and economics. While clean energy and thermal energy have different characteristics, PJM can guarantee reliability even while facing historic load growth and increasing extreme weather by speeding up the connection of new clean resources and building more transmission to carry power across the region. 

This report shows that a clean grid can provide power to millions that rely on it, at all hours of the day and night. These findings should be reassuring for state elected officials who routinely express alarm that households might soon be unable to turn the lights on at 3 AM in an emergency. PJM’s engineers know that the sun goes down at night, and the wind does not always blow – but the sky won’t fall as a result.

The great transition: Clean energy, load growth, and extreme weather

State utility regulators and grid operators alike across the U.S. are grappling with a changing electric system as they experience explosive demand growth. Power demand is now expected to grow 4.7 percent over the next five years, up from a 2022 forecast of 2.6 percent growth with new manufacturing, data centers and electric vehicles leading the surge.

Now couple that rising demand with more frequent episodes of extreme weather that have wreaked havoc on U.S. power grids and the scale of the challenge becomes clear. 

The power system is undergoing revolutionary change as coal, which at times during the 20th century provided more than half of the country’s electricity, fell to about 16 percent of the mix in 2023. Meanwhile, solar power developers installed about 32 GW of generation capacity last year, a 51 percent increase from 2022 exceeding the 30-GW threshold for the first time. While solar is by far the fastest growing source of new power in the U.S., new wind and battery storage assets are outpacing new natural gas generators.

PJM, the grid operator for parts or all of 13 states and the District of Columbia, analyzed how a rapid clean energy transition would affect a system that millions rely on for comfort, safety, and economic prosperity. They evaluated what changes would be needed to raise the amount of carbon-free energy (renewables plus nuclear power). This is a notable change in tune from PJM’s previous statements, in which they claimed that the clean energy transition would lead to significant reliability concerns as retirements outpace new resource replacements. 

State and federal policies in place now would boost carbon-free energy to 54 percent of the mix by 2035, while accelerating the addition of renewables would push that figure to 93 percent. Yet for either target to be met, PJM must figure out how to speed the addition of solar, wind and battery storage onto the system.

To reach 93 percent carbon-free energy, 71 gigawatts of coal, natural gas and oil generation must be retired. And while there’s no shortage of renewable projects ready to step in, a byzantine system for approving new grid connections has slowed the deployment of clean energy to a crawl. PJM must also upgrade its ability to share power with neighboring grid regions and to manage the variability created by relying on more intermittent power resources.

It takes more than five years on average for new generators to move through the interconnection process, a failing that has bogged down clean energy projects in waiting lines across the U.S. Earlier this year the Federal Energy Regulatory Commission (FERC) approved the first major overhaul of interconnection standards in two decades in a bid to speed the transition to renewables, but PJM has yet to fully comply with FERC’s new standards.

FERC is also tackling the thorny question of how to plan for all the new transmission that will be needed to rapidly deploy clean energy. Since 2014, North America has built just 7 gigawatts (GW) of large-scale interregional transmission (lines that can carry power over long distances across state lines) compared with 44GW in Europe and 260GW in China. The dearth of new transmission is crimping renewable power installations, which declined in 2022 - the first year-on-year drop since 2017, according to a report from American Clean Power. FERC’s landmark Order 1920 charts a path toward better transmission planning – it’s now up to PJM to take action and fully comply.

We know that fast-tracking the switch from coal and natural gas to renewables can be achieved without compromising reliability—and PJM now agrees—but PJM must act. A carbon-free energy future is within reach with new market rules, a streamlined process for new generation and close cooperation with FERC and neighboring power grids. NRDC stands ready to work with all stakeholders to get the job done.