The grid runs on reality, not wishful rhetoric

by Derrick Max

The July heat wave that pushed PJM toward record electricity demand should force Virginia policymakers to confront an uncomfortable truth: the electric grid does not run on mandates, slogans or wishful thinking. It runs on power that is available when people need it.

During this heat wave, PJM — the regional grid operator serving Virginia and all or parts of 12 other states and DC — came within striking distance of its all-time summer demand record and may well have exceeded it once emergency demand reductions are counted.

PJM’s measured July 2 peak reached 162.3 gigawatts, just below the old 2006 record of 165.6 gigawatts. But Steve Haner, writing in Bacon’s Rebellion, noted that about 6 gigawatts of demand had been shed through emergency demand-reduction programs. Add that curtailed load back, and underlying demand likely exceeded the old record, even if the official metered peak did not.

That distinction matters. PJM did not avoid a crisis because the needed power was comfortably supplied. It avoided it because emergency tools shaved demand at the moment of greatest stress. Grid failure is no longer a theoretical policy debate — the grid is operating near the edge. 

The reason is obvious. Extreme heat drives air-conditioning and cooling demand. Add Virginia’s booming data-center industry, especially in Northern Virginia, and peak demand becomes even harder to serve.

But the most important lesson from the heat wave is that the weather can lead to failure on both sides of the ledger.

The same heat dome that pushed demand toward record highs also suppressed wind generation. A heat dome is a high-pressure system that traps hot air. Under these conditions, air sinks, compresses and warms, producing stagnant conditions that not only causes heat to build, but also reduces wind output.

Wind power depends on wind. Reuters reported that low wind generation intensified PJM’s cost pressures during the heat wave. Haner added an even sharper observation: at peak afternoon times, PJM was getting more electricity from oil-fired generators than from wind. Wind was not available at the scale and hour the grid needed it most. Installed wind capacity is not the same thing as firm capacity during a heat emergency.

Solar has a similar problem. On hot, sunny days, solar can help reduce midday demand. But PJM’s reliability problem extended into the late afternoon and evening, when buildings remained hot, air conditioners kept running, families returned home, and data centers continued consuming massive amounts of electricity. That is precisely when solar output began to fall.

Solar cannot by itself carry a hot evening peak. This is the classic “duck curve” problem. Solar can help in the middle of the day, but the grid still needs dispatchable power when the sun fades and demand remains high. This is a reliability challenge.

So what carried the system?  Dispatchable power.

PJM had to lean on natural gas, coal, nuclear, oil-fired peakers, imports, emergency demand response and every other available tool to keep the lights on. Reuters reported that PJM ordered generators to run at maximum output and bring idle plants online, while operating reserves fell from about 22 gigawatts earlier in the day to about 5 gigawatts by evening. PJM avoided rolling blackouts, but only by taking emergency steps to stabilize the system.

Haner added another important detail for Virginia readers: PJM’s “deploy all resources” order was issued for the Dominion, BGE and Pepco zones, and he reported that this appeared to be the first time that tool had been used since it was added about a decade ago. That is a serious warning. The Mid-Atlantic region was not merely experiencing high prices. It was operating under emergency procedures meant to pull every available megawatt into service.

Reuters reported that PJM was dispatching costly fossil-fuel plants, rerouting congested power flows and managing heavily loaded transmission lines. It reported that coal was providing up to about 22 percent of system supply during the week, while high-cost gas and coal plants helped meet peak demand. In plain English: the resources most often targeted by political climate mandates were the resources PJM needed most when reliability mattered most.

Virginia needs an energy policy that understands the difference between energy that is occasionally available and energy that is available on demand. Nuclear plants provide steady baseload power. Natural gas plants can ramp up when demand surges. Coal and oil units, however disfavored politically, remain emergency backstops in tight conditions. Battery storage can only help for a limited number of hours — and as this week proved, would need to wait to be recharged at periods of lower demand or lower pricing in order to avoid recharging during the high priced demand surges. 

This is where Virginia’s data-center debate must become more honest. Data centers are not villains. They are part of the modern economy, and Virginia has benefited enormously from them. But they require massive amounts of reliable, around-the-clock electricity. We cannot welcome the world’s most energy-intensive digital infrastructure while simultaneously making it harder to build and operate the firm power plants needed to serve it. And data centers should not be seen or used as a safety valve when demand surges.

That may help in a crisis, but it is hardly a sound long-term energy strategy.

There is also an environmental irony. Virginia policymakers who oppose natural gas plants in the name of clean energy may be creating conditions that push data centers onto diesel backup generators during emergencies. Diesel backup generation is not an environmental victory. If Virginia’s choice is between modern, regulated natural gas generation serving the grid efficiently and emergency diesel generators scattered across data-center campuses during reliability events, the cleaner and more reliable option is obvious. Build and permit the generation the grid actually needs. The irony extends to the emergency use of coal and oil units on the grid as was done this week.

The price signals during the heat wave were just as alarming as the reliability warnings. Reuters reported that Virginia prices jumped from about $40 per megawatt-hour to more than $600 per megawatt-hour, and later reporting showed price spikes above $2,000 per megawatt-hour in Northern Virginia because of congestion.

The lesson of the PJM heat wave is that renewables have little value in a heat dome event. Wind and solar can contribute some energy. Solar can shave midday demand. Wind can produce power when weather conditions cooperate. But reliability is measured at the hour of greatest need, not in annual averages or political talking points.

When PJM was tested last week, it turned to dispatchable energy, emergency operating procedures, demand response, federal emergency authority and every available resource it could find. That should tell Virginia policymakers everything they need to know.

A serious energy policy must begin with reality: extreme weather increases demand; high-pressure heat domes can suppress wind; solar fades in the evening; data centers require constant power; and the grid must balance supply and demand every second of every day. Baseload and dispatchable generation are not relics of the past. They are the foundation of reliability in a modern economy.

Virginia can have economic growth, data centers, cleaner energy and reliable electricity. But not if it pretends intermittent resources alone can carry a record-breaking grid through a hot, windless evening. The path forward is energy abundance: preserve and expand nuclear, build more natural gas generation, strengthen transmission, and stop retiring firm capacity faster than reliable replacements can be built.

The grid just issued its warning. Virginia should listen.

Derrick Max is vice president of policy at the Jefferson Forum. This column is republished with permission from the Jefferson Forum.