PJM Interconnection

Between 2006 and 2008, natural gas prices were peaking at historic highs, and critics of competitive markets for electricity were citing the resulting high electricity prices as an indicator that the markets had failed. No amount of factual data showing the linkage between natural gas fuel costs and electricity prices could quell the furor in certain quarters.

Recent calls for Maryland to revert from a competitive electricity market to a monopoly system may be good-intentioned, but they are quite misguided. Innovation has replaced the inefficiencies of the old monopoly system, giving customers new choices, competitive prices and an efficient, reliable power supply.
 

Competitive electricity markets will stimulate plug-in hybrid-electric vehicle (PHEV) technology, facilitate integration of PHEVs with the power grid, and unlock consumer benefits. This message emerged during a conference sponsored by COMPETE and the University of Illinois-Springfield that explored the future of plug-in hybrid electric vehicles and the smart grid.

The COMPETE Coalition will sponsor a day-long conference October 5th to discuss the opportunities and challenges facing national electric vehicle deployment, grid modernization and how they tie into America’s Smart Grid future.
 
The free conference – Electric Vehicle Technology and Grid Modernization: How PHEVs and Smart Grid Come Together – takes place at the Phoenix Park Hotel in Washington, D.C., and is co-sponsored by the Center for Business and Regulation, College of Business and Management, University of Illinois-Springfield.
 

With the rapid growth of wind energy and demand for renewable energy sources, electricity providers are working with innovative companies to develop and implement energy storage solutions, according to a recent article by New York Times reporter Matthew Wald.
 

Smart grid technology is creating economic and environmental benefits, but must reach all consumers and enable intuitive energy use decisions to truly achieve its potential. This message was the focus of a recent panel discussion on consumer perspectives during a smart grid policy conference at the Brookings Institution.
 

Innovative smart grid and energy technology solutions can help achieve economic and environmental goals if customers have access to dynamic pricing. That message, and the role competitive markets play in these innovations, was front and center in remarks from national policy leaders at the recent National Town Meeting on Demand Response and Smart Grid. 
 
“Creating a smart grid is an essential part of the energy revolution,” said Congressman Ed Markey (D – MA) in a keynote address, before predicting that smart meter deployment will rise ten-fold over the next decade. “A global revolution in clean energy is needed, and competition between all for leadership in new energy will create jobs.”
 
Innovative new smart grid technologies are already springing up across the country, spurred on by competition. “Because we have organized markets, we are ahead in our ability to bring technology and demand response to consumers,” said Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, during a roundtable on the future of smart grid policy. Wellinghoff cited PJM Interconnection’s 9,000 megawatts of dispatachable demand and Plug-in Hybrid Electric Vehicle pilot program, as well as Constellation NE’s VirtuWatt technology.

Clean energy resources, including demand response and energy efficiency, made up nearly three-fourths of new capacity additions in PJM Interconnection’s recently completed Reliability Pricing Model (RPM) auction. This new announcement continues the phenomenal growth of clean energy and demand response technology in the nation’s largest competitive wholesale electric market.
 

Clean energy generation has grown at a phenomenal pace in the PJM Interconnection market.  Data from PJM’s Environmental Information Services’ (EIS) tracking system shows that over the past five years, wind generation has increased almost 1,300 percent, from 500,000 megawatt-hours (MWh) in 2005 to 6,500,000 MWh in 2009. Solar power, which accounted for only 100 MWh in 2005, produced more than 81,000 MWh – a 3,000 percent increase.

This infusion of clean energy has reduced PJM’s carbon dioxide emissions per MWh of generation by 12 percent since 2005, created green jobs, and provided customers with low-carbon energy alternatives, according to the EIS data.

Regional electricity markets are well-structured and well-regulated, and by delivering competitive results are providing real economic and environmental benefits to consumers, the Independent Market Monitors for the majority of regional transmission operator/independent system operator (RTO/ISO) markets said at a COMPETE-sponsored Capitol Hill policy briefing. These markets are creating innovation, new investment and competitive electricity rates – all the while ensuring system reliability, the monitors said.