2020 RRS Annual Assessment

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• New generating plants powered by Marcellus and Utica shale natural gas • New wind and solar units driven by federal and state renewable incentives • Generating plant deactivations • Market impacts introduced by demand resources and energy efficiency programs PJM expects to add approximate 1,370 MW of new generation over the 10-year planning horizon, predominantly variable energy resources. Additionally, PJM is planning to retire approximately 770 MW of coal- fired generators. Gas-fired generation supplies about 44 percent of the capacity in PJM in 2020. Coal and nuclear provide 20 percent and 11 percent of PJM capacity, respectively. Hydro and pumped storage provide 3 percent and 10 percent, respectively, for summer peak. Solar is beginning to become an increase capacity source for PJM at approximately 7 percent. Reduced load growth, energy efficiency, generation shifts, and aging infrastructure drivers, among others, continue to shift transmission need away from large-scale, cross-system backbone projects toward projects focusing on transmission owner criteria. Approximately 187 miles of new transmission lines in the SERC PJM assessment area are in the design/construction phase, and are projected to enhance system reliability, economics or congestion and VER integration.

State of Reliability of SERC PJM The Anticipated Reserve Margins do not fall below the Reference Margin Level for any year of the assessment period in the SERC PJM subregion. The reserve margin values shown are for the entire PJM area, not just the area of PJM that is within the SERC footprint. The SERC PJM assessment area is slightly winter peaking, with a forecast total internal demand of 20,898 MW in 2020. The total internal demand for winter exceeds the total internal demand for summer by 1,690 MW. The net internal demand for winter is expected to increase by approximately 1.27 percent over the 10-year planning horizon, making SERC PJM the highest growing subregion within SERC. SERC PJM differs from other subregions in SERC in that Demand Response resources can participate in all PJM Markets—Capacity, Energy, and Ancillary Services. PJM requires that PJM member Third Party Suppliers (Curtailment Service Providers - CSPs) bring these resources to PJM Markets; it is the responsibility of these CSPs to act as Market Operating Centers, relaying PJM instructions for load reductions (in any of the markets) to these resources. As with many of the SERC subregions, Distributed Energy Resources (DERs) are accounted for in the load forecast. For the purposes of the long-term load forecast, PJM defines distributed solar generation as any solar resource that is not interconnected to the PJM markets. These resources do not go through the full interconnection queue process and do not offer as capacity or as energy resources. Furthermore, the output of these resources is netted directly with the load. PJM does not receive metered production data from any of these resources. There have been no current or anticipated operational impacts of DERs noted in PJM. PJM’s Regional Transmission Expansion Process (RTEP) continues to manage an unprecedented capacity shift driven by federal and state public policy and broader fuel economics:

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