In a keynote address at a March 2023 Electric Power Supply Association conference, PJM CEO Manu Asthana spoke about the need to slow down thermal retirements. According to Asthana, “…the math is pretty straightforward. I think we need to add [resources] faster … but I also think we need to subtract slower and subtract generation only when the replacement generation is here at scale.”
Asthana laid much of the blame for generation retirements on state and federal environmental and climate policies. To date, more than two-thirds of the U.S. coal fleet has either retired or announced plans to retire by 2030. In addition, the Environmental Protection Agency is implementing or developing at least six rules that will cause more coal plant closures by the end of the decade. According to Asthana, “Policy reasons are harder to reverse. It’s not that you can send a market price signal that will necessarily override policy signals.”
Asthana’s remarks followed the release of a PJM white paper which warned that at least 40,000 megawatts (MW) of generation were at risk of retirement, which could reduce PJM’s reserve margin. Last year, less than 2,000 MW of resources were added to the queue, prompting Asthana to observe, “When you do the math – when you look at the rate of retirements, you look at the rate of growth, and you add in the current rate of throughput for our queue – we are headed for some trouble. And that trouble [resource adequacy] is likely to find us later in this decade.”
RTO Insider provides full coverage of Mr. Asthana’s speech here.
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