On January 2, 2014, a sudden stratospheric warming caused a breakdown of the polar vortex, a semi-permanent low-pressure system of cold polar air that helps the jet stream maintain a roughly circular path as it travels around the globe.
A healthy polar vortex keeps the jet stream in line, which in turn keeps the cold air up north and the warm air down south.
An unhealthy polar vortex allows the jet stream to break apart, allowing the Arctic’s frigid air to escape southward as it did in 2014. The 2014 Polar Vortex (officially the 2014 North American Cold Wave) led to record low temperatures in the US and caused PJM’s grid to face dire reliability concerns.
In the wake of the 2014 Polar Vortex, PJM established a new market design to better procure resources when the grid is stressed due to extreme weather.
Five years later, the PJM grid would again be challenged when a weak polar vortex led to temperatures in the US plummeting to record lows, including -23 degrees in Chicago in late January 2019.
That the PJM grid maintained its reliability in the winter of 2018/19 is a sign that recent market changes are working as designed.
Let’s examine those changes with an eye on how commercial and industrial organizations in the region can leverage their existing energy assets and achieve demand-side energy management success.
What did Winter 2014 Teach PJM?
On January 14, the coldest day of winter in 2014, 22% of PJM’s generation was unavailable to meet consumer demand. PJM knew they had to take action to ensure the grid had enough capacity in the future to meet the most daunting and coldest circumstances.
“To ensure reliability, we’re doing everything humanly possible. If the lights aren’t on, nothing else matters.”
–Terry Boston, PJM President and CEO
2014 PJM Annual Report
To guard against future outages like the ones experienced in 2014, PJM proposed to the Federal Energy Regulatory Commission (FERC) a redesign of the region’s Reliability Pricing Model (RPM), the capacity market that ensures long-term grid reliability by securing the appropriate amount of power supply resources needed to meet predicted energy demand three years in the future.
PJM’s Transition to Year-Round Demand Response (DR)
One of the more significant changes PJM implemented involves a transition to demand response programs that require year-round participation.
PJM’s two emergency capacity demand response programs available in 2019, Base Capacity and Capacity Performance, each reward year-round participation from its participants.
Base Capacity, however, differs from Capacity Performance in that it requires performance in the summer months of June through September, but can also reward for responding to dispatch throughout the year. 2019 will be the final year PJM offers Base Capacity.
These new programs replaced the legacy DR programs PJM previously offered until the end of the 2017/2018 program–Limited DR, Summer Extended DR, and Annual DR.
How has Capacity Performance affected grid reliability?
The short answer is PJM’s grid is doing just fine having shifted to Capacity Performance.
In an analysis on its system performance during the “bomb cyclone” cold snap from Dec. 28, 2017, through January 7, 2018 (the region’s coldest stretch since 2014), PJM confirmed its grid performed well, with excess resources available on days when temperatures were the most frigid.
But that doesn’t mean PJM doesn’t see room for improvement in 2019.
This post was excerpted from the 2019 State of Demand-Side Energy Management in North America, a market-by-market analysis of the issues and trends the experts at CPower feel organizations like yours need to know to make better decisions about your energy use and spend.
CPower has taken the pain out of painstaking detail, leaving a comprehensive but easy-to-understand bed of insights and ideas to help you make sense of demand-side energy’s quickly-evolving landscape.