Governors, Renewables & PJM

Ignorance or Gaslighting?

The Governors of New Jersey, Pennsylvania, Maryland and Delaware have recently complained about high electric prices in the area served by the PJM ISO. They asserted that these high rates were caused by PJM’s failure to add renewables to the grid more rapidly, rather than more expensive natural gas generators. Governor Murphy of New Jersey said: “PJM has lost the plot.” It appears more likely that the “plot” in question was a political goal rather than an economic plan. However, it is clear that the governors and PJM are not “singing out of the same hymn book”.

US EIA reports the following construction costs for electric generators installed in 2022 and their capacity factors (CF):
Solar$1,588/kW~19% CF

Wind$1,451/kW~30% CF

Batteries$1,205/kW~95% CF

Natural Gas$ 820/kW~90% CF

The PJM region possesses the following generation capacity by type:

Solar 9,005 MW

Wind 12,073 MW

Batteries 361 MW (also 4,492 MW pumped hydro storage)

Natural Gas 56,124 MW

Total 196,380 MW (includes nuclear, coal, hydro, etc)

The annual output of the renewable generation in the PJM region is approximately.

Solar 9,005 MW * 8760 hrs/yr * 0.19 CF = 14,987,922 MWh

Wind 12,073 MW * 8760 hrs/yr * 0.30 CF = 31,727,844 MWh

Total 46,715,766 MWh

This renewable generation output largely displaces an equivalent quantity of output from the natural gas and coal generation operating in the PJM region. The primary roles of the renewable generation are to replace retiring coal and natural gas generators at the end of life and to provide additional generating capacity to accommodate load growth in the region. However, replacing existing fossil generators and adding reliable incremental generation capacity with solar and wind requires the addition of electricity storage capacity to render the renewable generation dispatchable.

The current electricity storage resources in the PJM region total 4,853 MW and approximately 20,000MWh, or approximately the 25% of annual renewable generator output required to assure dispatchability.

Replacing 1 GW of coal generation with a CF of ~85% would require installation of approximately 0.85/0.19 = 4.5 GW of solar capacity, approximately 0.85/0.30 = 2.8 GW of wind capacity and approximately 1 GW * 0.85 CF * 8760 hrs/yr * 0.25 = 1,862 GWh of electricity storage. The primary battery storage system currently being installed for grid level storage is the Tesla Megapack, which stores 19.3 MWH deliverable at a rate of 4.9 MW over a 4-hour period. Replacing 1 GW of coal generation with solar generation would thus require (1,862 GWh * 1,000 MWh/GWh) / (19.3 MWh) = 96,500 Megapacks, at an estimated installed cost of $8,128,870 per unit, or a total cost of approximately $784 billion.
Therefore, the total cost of replacing 1 GW of dispatchable coal generation with dispatchable solar generation would be approximately 4.5 GW * 1,000,000 kW/GW * $1,588/kW = $7.1 billion + $784 billion = ~$791 billion. The total cost of replacing 1 GW of dispatchable coal generation with dispatchable wind generation would be approximately 2.8 GW * 1,000,000 kW/GW * $ 1,451/kW = $4.1 billion + $784 billion = ~$788 billion.

The total cost of replacing 1 GW of coal generation with natural gas combined-cycle generation would be approximately $850/kW * 1,000,000 kW/GW = $850,000,000. The NG generator fuel cost would be approximately [3,412 Btu/kWh / (50% efficiency)] * 1,000,000 kWh/GWh * 1/1,000,000 Btu/mcf * $3.00/mcf = $20,500 / GWh or approximately $20,500 * 8760 * 0.45 (grid annual load factor) = ~$81 million per year, or ~$3.2 billion over a 40-year service life.

Therefore, ignoring O&M costs, dispatchable solar and wind would cost ~$790 billion over a 20-year service life vs. dispatchable natural gas at ~$4 billion over a 40-year service life.

I think the governors have not discovered the “plot”, or they are “gaslighting” their constituents.

Originally published here.