In 2012 a total of 1,400 MW of coal-fired plants were retired in the American Transmission System Inc. (ATSI) load zone in the northern Ohio part of the PJM Interconnection system.
“These retirements comprised nearly 13% of total generating capacity in that zone,” said the U.S. Energy Information Administration in the Sept. 3 version of its Today in Energy feature. “Instead of building new replacement power plants, PJM is upgrading its transmission system to increase the use of existing electric generating capacity outside the ATSI zone to satisfy its load with an adequate safety margin.”
Electric systems can ensure a reliable supply of electricity by building new power plants, but in a highly populated area where significant backup power is needed in reserve, it may be more cost-effective to upgrade the transmission system to improve the flow of power between regions, EIA noted. PJM has an overall reserve margin of 29%, which is 13 percentage points above its target. But the coal retirements created reliability concerns that PJM will address through transmission upgrades, taking advantage of the higher reserve margin elsewhere in the system.
The ATSI region faced a capacity shortfall after companies owned by FirstEnergy (NYSE: FE) announced the retirement of 1,400 MW of coal-fired capacity in 2012, followed by another 885 MW in 2015. This represents a 21% drop in the amount of electric capacity in this region, while the rest of PJM will remain relatively well-supplied, EIA noted.
Each year PJM holds auctions for capacity and sets a price per megawatt-day for available generating capacity, three years into the future. The shortfall in capacity was the main factor driving a high price for the ATSI region in PJM’s May 2012 capacity auction.
Following the auction, PJM identified 35 transmission projects, each costing more than $5m, that could alleviate transmission congestion in the ATSI region. These projects would allow more power from other parts of PJM to flow into the ATSI zone, avoiding the need to install new generation in ATSI. In the May 2013 auction, the ATSI regional clearing price was more in line with the other PJM regions, reflecting these planned transmission upgrades, EIA said.
Some of the key transmission projects in the ATSI zone include:
- Installation of the Toronto-Harmon 345-kV transmission line that runs west from a substation in Toronto, Ohio (near the border with West Virginia) to Harmon, in northeastern Ohio, for an estimated cost of $218m.
- Installation of the Mansfield-Northfield 345 kV transmission line from the Mansfield substation in Beaver County, Pa., to the Northfield substation, about 20 miles southwest of Cleveland, for an estimated cost of $184.5m.
- Conversion of retiring coal units at the Eastlake and Lakeshore power plants to synchronous condensers for a total estimated cost of $120m. Synchronous condensers provide voltage support, allowing the ATSI zone to bring in more power from the rest of PJM.