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Power plant failures in the East of US increase amid limited gas supplies and freezing weather

On Sunday, power plant outages swept across the east coast of the United States as constrained natural gas supplies and frigid temperature cut the 'electricity output' of the region’s generation fleet.

PJM Interconnection (the largest U.S. regional network that serves 67,000,000 people in the East & Mid-Atlantic) reported that nearly 21 gigawatts were lost due to?generation failures, and that most of this capacity was forced offline. Those outages accounted for about 16% of PJM’s Sunday afternoon demand, which was 127.4 GW.

PJM issued a pre-emergency directive on Sunday afternoon, mandating that certain customers participating in its curtailment programs reduce their electricity usage. The program pays customers to reduce their electricity use during critical times.

PJM’s order was intended to reduce the demand spike in PJM’s territory, while also asking generator operators to conserve their runtime for colder weather or higher electricity demands later in week.

Pieter Mul is a grid specialist and an associate partner in PA Consulting's Energy and Utilities practice.

The estimated domestic demand for natural gas is 146.7 Bcf/d. This is 3.6 Bcf/d less than Saturday. It ranks No. 10 all-time.

Matthew Palmer, head of Americas Gas Research for S&P Global Energy, said that the US winter storm is so far less severe from a natural-gas production and price perspective than previous storms like Uri and Elliott in 2021 and 2022. However, the risk of sustained cold is not over.

Mul stated that PJM outages were higher than planned. Mul added that the PJM grid is less flexible than it was a few year ago due to power?plant retirements, and a surge of demand from data centres.

PJM territory is also affected by bottlenecks on its high-voltage transmission lines that hinder the transfer of power from east to west. PJM could not use cheap electricity in Illinois, which was sometimes at negative prices due to wind energy.

Cloud cover increased in the afternoon as snow and sleet fell on the major cities, including Boston, New York, Philadelphia, and Washington, DC. This caused the grid to lose access to solar energy.

Grid operators reported that power?prices for PJM, New York, and New England increased between $400 and $700 a MWh on Sunday afternoon. Grid operators reported that the increases were due to a demand that is exceeding their forecasts.

ISO New England (which serves six states including Boston and Hartford) reported a demand of 20.2 gigawatts at 1:45 pm EDT. This is higher than the projected peak load of 19 GW later in that day.

Due to the limited access to natural gas, New England's grid produced nearly 40% of its output from oil-fired plants. Natural gas, which is usually the grid’s primary fuel source, only accounted for 30% of grid power plant fuel.

Mul pointed out that New England's diesel fuel oil supply can run low and is not easy to replenish during winter weather conditions. ISO New England’s excess?capacity has dropped from several gigawatts to 1.1 GW.

ISO New England had issued an alert on "abnormal circumstances" earlier in the day, asking operators of power plants not to schedule maintenance or do anything that could affect grid reliability.

Dominion Energy territory in Virginia, outside Washington D.C. has seen real-time wholesale prices of electricity rise to $1,800/MWh by early Sunday morning, from $200/MWh Saturday morning. Virginia is home to the largest cluster of data centres in the world. These centers are used for artificial intelligence, and the rising prices and power demand in large parts of the United States have been attributed to this.

Winter Storm Fern swept parts of the nation, and PJM data shows that the spike in demand began late Saturday evening. PJM expects a record-breaking winter demand on Tuesday due in part to the electricity requirements of data centers. Dominion said that extended cold temperatures and heavy snow this week could be the biggest winter event to impact the utility.

PJM forecasts demand at 147.2 Gigawatts which would surpass the current winter electricity demand record of?143.7 GW, set in January 2025.

As regional grids struggle to meet the surge in demand, spot wholesale electricity prices have been raised across the U.S. throughout the weekend. Utility companies may be forced to increase spot electricity prices when demand exceeds forecasts.

Local distribution lines bring electricity to homes, businesses and regional grids. According to PowerOutage.us these local power lines have been disrupted, and nearly 1 million people were without power Sunday. More than 300,000 of them in Tennessee, and over 100,000 in each Mississippi, Texas, and Louisiana. Kentucky, Georgia Virginia, and Alabama were also affected.

Electric Reliability Council of Texas, the main grid operator in Texas, has forecast a peak demand of 85,1 GW on Monday morning. This compares to a seasonal capacity of almost 100 GW. According to ERCOT, day-ahead prices suggest that the price of electricity could reach $1,000 per MWh on Monday morning. Tim McLaughlin, Liz Hampton, David Gregorio and Nick Zieminski edited the story.

(source: Reuters)