Dive Brief:

• PJM Interconnection has completed the first assessment of its new Capacity Performance (CP) generator standards, concluding that the enhanced payments and penalties did spur widespread improvements in generator performance — though not for coal and oil units.
• The grid operator said it observed improvements of more than 50% in many operating parameters after the new standards were in place.
• The new rules were implemented following widespread outages during the Polar Vortex of 2014, and now that winter event has been compared with the cold snap and bomb cyclone earlier this year. 

Dive Insight:

The report comes with caveats: Capacity Performance won't be fully implemented until the 2020-2021 delivery year; the winter comparisons are not exact; and PJM has only called one Performance Assessment Interval, during which it holds generators to the Capacity Performance deliverability standard.

All that aside, PJM concluded that "based on the data analyzed in this report, overall generator performance has improved from the inception of Capacity Performance to the present day."

But improvements were not uniform. While gas generators showed improvements, "both coal and oil Capacity Performance resources showed no improvement in forced outage rates from the Polar Vortex to the cold snap," PJM found. "Additionally ... coal and oil Capacity Performance resources did not perform as well as their non-Capacity Performance counterparts."

All fuel types had forced outage rates lower during the 2017-2018 cold snap than during the 2014 Polar Vortex peak, for both Capacity Performance and non-Capacity Performance resources. "The nuclear resources performed well during the cold snap, just short of their full capability due to several partial outages," PJM found. 

Understanding why coal and oil Capacity Performance resources failed to outperform non-Capacity Performance "requires some additional analysis," PJM concluded.

But while data is limited, the grid operator acknowledged that a decrease in forced outage rates, especially over the peak hours of the 2017-2018 cold snap, "is also a positive indicator that PJM’s resources were available when they were needed most."

PJM previously examined system performance during a cold snap from Dec. 28, 2017, through Jan. 7, 2018 and concluded previous adjustments made in the wake of the 2014 Polar Vortex have been effective. The grid operator said both the transmission system and generators performed well, but also reported an 11-fold increase in uplift charges, which are paid to generators when locational marginal prices do not cover the costs of serving load.