PJM greenlights $318M in transmission upgrades

Dive Brief:

The PJM Interconnection Board has authorized $318 million transmission upgrades as part of its continuous system review process, and has also set the installed reserve margin at 15.8% for 2021-2022.
Projects include 10 upgrades in the PJM Mid-Atlantic Region and two in the PJM Western Region. Many individual projects have a budget under $5 million, but PJM officials say they maintain transmission grid reliability and wholesale power market efficiency.
The installed reserve margin has been sliding, as power demand stagnates. PJM also affirmed a 16.1% margin for the 2018/2019 delivery year, and a 15.9& margin for 2019/2020 and 2020/2021 delivery years.

Dive Insight:

A slate of transmission upgrade projects approved by PJM is significantly smaller than one approved in October. The new batch focuses on smaller improvements that are expected to have wide impacts.

"Maintaining the reliability of the grid involves continuously reviewing the system and moving ahead with transmission projects," PJM President and CEO Andrew Ott said in a statement. "Today, the board has authorized a number of smaller projects, each of which is important to maintaining reliability and efficiency for people who depend on both PJM and our members."

Of the larger projects, PJM says two will alleviate reliability issues in densely populated areas of northern New Jersey. One project, to dismantle and rebuild a 230-kV line to address load requirements for future growth, is estimated to cost $90.4 million. Another project replaces an overloaded 230-kV line at an estimated cost of $80 million

Two months ago, the board of directors authorized $1 billion in electric transmission projects it said was necessary to ensure efficient and reliable power supplies for 65 million customers the grid operator serves.

PJM's board has also approved the Installed Reserve Margin (IRM) for each of the next four delivery years. The decisions are based on results from PJM's annual Installed Reserve Margin Study, which helps determine the price and amount of capacity procured in PJM's Reliability Pricing Model capacity auctions.

The board approved a 15.8% reserve margin for the 2021/2022 delivery year, a 16.1% margin for the 2018/2019 delivery year, and a 15.9% margin for the 2019/2020 and 2020/2021 delivery years.