By Tim McLaughlin
BOSTON, July 1 (Reuters) – PJM, the largest U.S. electric grid operator, on Wednesday detailed price spikes and warnings of massive transmission line congestion as it braced for record-breaking demand driven by a heatwave ahead of July 4 celebrations.
Spot wholesale electricity prices early Wednesday surged to nearly $300 per megawatt hour in some parts of PJM’s territory, which serves 67 million people in the Mid-Atlantic, South and Washington, D.C. During off-peak or milder periods, spot prices typically hover around $25 to $40 per MWh.
PJM’s low-voltage alert signaled that the risk of rotating outages is higher as voltage levels on transmission lines weaken. The grid operator also has forewarned power plants to bring generators out of maintenance so they can be ready to meet surging demand.
Grid expert Georg Rute, CEO of Gridraven, said extreme heat, low wind and surging demand are coinciding at a time when transmission lines have the least margin for safety. That is contributing to spikes in electricity prices, as the cost of moving power rises amid heavy congestion.
Temperatures this week are forecast to hover around 100°Fahrenheit (38°Celsius) from Boston to Washington, D.C., near Northern Virginia’s vast data center hub, driving a surge in air-conditioning demand that will further strain PJM and other regional power grids.
PJM’s biggest test will come about 6 p.m. EDT on Thursday when grid demand is expected to be 166.3 gigawatts. That would break an all-time demand record of 165.6 GW set 20 years ago, according to PJM’s latest forecast.
To meet unexpected shortages, PJM reported 18 GW of reserve power resources that can be brought online within 30 minutes. That is about six times higher than the reliability requirement.
Meanwhile, spot electricity prices will likely spike to more than $1,000 per MWh Wednesday evening as PJM operators manage congested power lines around Virginia’s data center hub and dispatch expensive power plants mainly fueled by gas and coal to meet the day’s highest electricity consumption.
In the Midwest, another electric demand record could be broken as early as Wednesday evening. That’s when forecasts by the Midcontinent Independent System Operator (MISO), the regional grid operator for 15 U.S. states in the Midwest and the South, indicate that the demand record of 127.1 GW could fall.
(Reporting By Tim McLaughlin; Editing by Mark Porter)
