Blog December 11, 2018

Effective on October 1, 2018, the PJM power market installed a new PA Central Interface. The purpose of the interface, composed of the Juniata – Sunbury, Susquehanna – Wescosville, and Lackawanna – Hopatcong lines, is to control voltage imbalances when one of these lines is out of service.

With the Lackawanna – Hopatcong outage looming on December 4, market participants questioned the implications of this new interface and reached out to Genscape’s Power Market Analysts for answers.

First, using the constraint impact tool in Genscape’s Nodal Market Insights (NMI) platform, analysts pulled the market impacts for a similar constraint, which was Hopatcong-Lackawanna for loss of Juniata-Sunbury on July 22 (two of the three lines that make up this interface, with the third line out of service when the constraint hit). This constraint resulted in considerable drops in prices at several new gas generators in the PPL zone of PJM, including:

Figure 1:  A depiction of 500kV transmission elements with selected gas resources based on the Nodal Market Insights platform.
Figure 1:  A depiction of 500kV transmission elements with selected gas resources based on the Nodal Market Insights platform. Click to enlarge
  • Panda Hummel: 1,124 megawatt (MW) in Snyder County, PA
  • Moxie Freedom: 1,029MW in Luzerne County, PA
  • Lackawanna: 1,480MW in Jessup, PA

Next, Genscape’s PJM desk carried out a transmission loading relief (TLR) analysis to confirm the impacts of other lines on the interface going out of service. Through the analysis, the PJM team identified the generation and load buses with the largest impact on the PA Central Interface.

The results confirmed the initial hypothesis. The PA Central Interface effectively disincentivizes generation in PPL when the capacity to carry power away from the zone is limited by an outage. Typically when a constraint binds, generators can increase output on the sink-side of the constraint to decrease flows on the line or interface at risk. In this instance, however, the sink-side generation was not present to alleviate the pressure. Therefore, the only remedy to fix congestion on the PA Central Interface is to force the new gas generators in PPL to reduce their power generation.

The recent influx of gas fired generation across Pennsylvania built on the natural gas rich Marcellus Shale is changing long established patterns. Originally, the 500 kilovolt (kV) network in Pennsylvania was built to carry electricity from coal generators built atop the coal mines of West Virginia and Western Pennsylvania to load centers on the East Coast. Now, the proliferation of natural gas generation challenges the West – East power flow paradigm. The new patterns are dynamic and will impact capacity factors, margins, and strategies.

Genscape’s Power Market Analysts are constantly watching the market, providing clients with unique insight into regional changes and market updates. We leverage our Nodal Market Insights platform to provide quantifiable predictions about congestion events across the power grid. We help clients to understand fundamental drivers, market pricing, risks, and scenarios across markets like PJM. To learn more, please click here.