In Q2 2024, we expected to add about 6.9 GW of storage capacity but ultimately reached just 57% of that target. In the same window in 2023, only about half of the expected facilities came online.

Most of the new batteries- 97% of them, actually- ended up in ERCOT, WECC, and CAISO territories. The Western Electricity Coordinating Council (WECC) which includes the California Independent System Operator (CAISO), is projected to climb to 15.838 GW of battery storage capacity by the end of 2024 and surpass 20 GW in 2025, according to the North American Electricity Long-Term Forecast Supplement. ERCOT is expected to hit 7.2 GW in 2024 and surpass 10 GW in 2025.

According to the data, ERCOT had the most additions in Q2 with 1.4 GW, increasing its total capacity to 7.74 GW, or 32.6% of total US capacity. CAISO is the only grid operator with more, adding 1.388 GW in Q2 to reach 9.867 GW total storage capacity, accounting for 41.5% of total U.S. capacity, per S&P Global Commodity Insights.

S&P expects ISO New England to surpass 1 GW in 2025; New York ISO (NYISO) and the Midcontinent ISO (MISO) are expected to reach that milestone in 2026, followed by PJM Interconnection (PJM) and the SERC Reliability Corporation in 2027.

The top five largest projects added in Q2 were:

• Ørsted’s 300-MW Eleven Mile Solar Center in Arizona, the sixth-largest U.S. BESS
• Plus Power’s 250-MW Sierra Estrella Energy Storage in Arizona
• Calpine Affiliates’ 230-MW Nova Power Phase 1 in California
• Calpine Affiliates’ 230-MW Nova Power Phase 2 in California
• Longroad Energy Holdings’ 215-MW Sun Streams PVS in Arizona

According to S&P Global Commodity Insights, the largest facility is still Florida Power and Light’s 409-MW Manatee Energy Storage Center, which started operations in Q4 2021.

The companies with the most battery energy storage capacity in the U.S. are:

• NextEra Energy Resources with 3.369 GW
• ENGIE North America with 1.561 GW
• Axium Infrastructure with 1.125 GW
• Plus Power with 1.059 GW
• Vistra Energy with 1.023 GW

The states with the most battery energy storage are:

• California with 10.3 GW
• Texas with 7.74 GW
• Arizona with 1.893 MW
• Nevada with 1.125 GW
• Florida with 545 MW

Five states have between 100 and 500 MW, nine states have between 50 MW and 100 MW, and 20 states have less than 50 MW of storage capacity through Q2 2024. 11 states have no battery storage capacity, according to S&P Global Commodity Insights.

Reasons for growth

Lithium prices declined in 2024 and are more stable than a couple of years ago, leading to some certainty in financing battery projects. Platts, part of S&P Global Commodity Insights, assessed lithium carbonate CIF North Asia at $12,000/mt on August 13. That’s down $3,000/mt from the start of 2024 but follows two years of volatility that eventually saw the price collapse from a record of over $78,000/mt in November 2022 to $15,000/mt at the end of 2023.

Sodium-ion alternatives are also starting to gain a foothold, diversifying the battery market. Natron, the only commercial manufacturer of sodium-ion batteries in the United States, recently announced it will invest $1.4 billion to establish a sodium-ion battery giga-factory in Edgecombe County, North Carolina. Natron’s sodium-ion batteries were the first in the world to receive a UL 1973 listing, allowing them to be implemented in the data center, forklift, and electric vehicle (EV) fast-charging markets.

In addition, Commodity Insights notices battery energy storage is often the quickest way to add new capacity; constructing solar and wind generation takes longer and can be trickier considering permitting and labor costs. The decision to add energy storage is often dependent upon the needs of the region.

“The [ISO New England] battery forecast was increased partially to offset the capacity losses from solar and wind,” explains Annie Gutierrez, Commodity Insights senior research analyst. “In regions like ERCOT, data centers are driving increased demand compared to our last outlook which is increasing the need for firm capacity.”

Indeed, ERCOT is efficiently managing record-breaking demand days thanks to a more balanced renewable portfolio that includes more than 8 GW of new solar in the last year and a robust bevy of battery energy storage systems, including Jupiter Power’s new 400 MW BESS in Houston.

However, saturation in the Texas market is becoming an increasingly common topic of conversation among battery players. ERCOT’s connect and manage approach is efficient at getting Distributed Energy Resources online in a timely fashion, but Texas continues to curtail renewable energy sources due to transmission constraints.

Looking ahead to Q3

According to S&P Global Commodity Insights, more than 5 GW of energy storage is expected to come online in the third quarter of this year. If all of it is added (it won’t be, see above), it would represent a more than 20% increase in U.S. capacity quarter over quarter.

Many planned Q3 additions are also in the West and Texas. Less than 325 MW is expected to come online in the Southeast, Midwest, and Northeast.

The five largest Q3 projects to keep an eye on:

• Enel Green Power’s 305.5-MW GulfStar Power in Texas
• Jupiter Power’s 302.9-MW Old Aqueduct in Texas
• Clenera’s 300-MW Atrisco Energy Storage in New Mexico
• UBS Asset Management’s 209.3-MW Citadel BESS in Texas
• ENGIE’s 200.8-MW BRP Paleo BESS

This article was originally published on Renewable Energy World.

Consumers Energy is closing all three coal units of the complex by 2025, 15 years earlier than originally planned. The utility said this closure will mark the company as one of the first U.S. utility providers to eliminate coal burning and is part of its Clean Energy Plan for a carbon-neutral energy grid by 2040.

The Campbell complex is slated to close by June 1, 2025. It is made up of three units that were built in 1962, 1967 and 1980. They are the last of 12 coal-fired units ― including those at the Cobb (Muskegon County), Whiting (Monroe County), Weadock (Bay County), and most recently, Karn (Bay County) plants ― that started closing in 2016.

As with the other plants, Campbell complex employees will be offered other job opportunities with the company. In partnership with community leaders, the site will be redeveloped following its demolition in 2026 or later.

In the meantime, Consumers Energy plans to offer bus tours of the Campbell complex on Sept. 21. People must sign up in advance for scheduled times, which are available on a first-come, first-served basis. The free tours will last about an hour, including an opportunity to go inside.

“We’re excited to give our friends and neighbors the opportunity to look inside Campbell as we make this major energy transition,” said Norm Kapala, Consumers Energy’s vice president of generation operations. “Our Campbell complex and the people who work here have served our state faithfully with reliable energy for generations. We want to provide an opportunity to understand and appreciate that legacy.”

The company purchased and started operating the 1,200 MW natural gas-fired Covert Generating Station in Southwest Michigan’s Van Buren County last year, matching most of the energy that Campbell provides. Consumers Energy continues to develop clean energy projects, including five Michigan wind farms and the Muskegon Solar Energy Center, which is slated to begin operations in 2026.

“We will be busy the next nine months as we continue to operate Campbell right up until it closes. We’re committed to a useful future for this property, but not before we take the time to reflect on the complex’s important work serving Michigan,” Kapala said.

The amount of coal transported in the United States decreased 8% in 2023, continuing a trend in which coal shipments have generally decreased over the past two decades as coal’s share of power generation has declined in the United States. The amount of coal transported to power plants, which are often located far from mines, decreased by more than half, falling from 957 million tons in 2010 to 422 million tons in 2023.

However, the U.S. Energy Information Administration (EIA) expects the decline in coal consumption to reverse this year. In its recently published July update to the Short-Term Energy Outlook, EIA forecast an increase in use of coal to generate electricity in the United States this year, with use dropping back to about 2023 amounts in 2025.

The Cambridge Energy Storage Project in Cambridge, Minnesota will deploy Form Energy’s iron-air battery technology, capable of storing energy for up to 100 hours, or several days, the company said.

Form Energy said this is the first commercial deployment of the company’s iron-air battery. The system will be manufactured at the company’s Form Factory 1 in Weirton, West Virginia, and is expected to be operational by late 2025.

Following the project’s completion, Great River Energy plans to conduct a multi-year study to evaluate the system’s performance and potential for broader deployment. 

Iron-air battery technology uses the principle of reversible rusting. The battery cells contain iron and air electrodes and are filled with a water-based, nonflammable electrolyte solution. While discharging, the battery absorbs oxygen from the air and converts iron metal to rust.

While charging, the application of an electrical current converts the rust back to iron and the battery emits oxygen. The technology has lower costs compared to lithium-ion battery production.

Form Energy has several iron-air battery projects underway across the U.S.

One plan is to deploy 10 MW/1,000 MWh systems at two retiring Xcel Energy coal plants: The Sherburne County Generating Station in Becker, Minnesota and the Comanche Generating Station in Pueblo, Colorado.

Form Energy also has an agreement with Georgia Power to deploy a 15 MW/1500 MWh iron-air battery system in Georgia. The multi-day battery system could come online as early as 2026. 

Company co-founder and CEO Mateo Jaramillo appeared on the Factor This! podcast last year, where he discussed the company’s history and its recent efforts to commercialize its 100-hour battery.

Episode 54 of the Factor This! podcast features Form Energy co-founder and CEO Mateo Jaramillo, a former Tesla executive pushing for deep decarbonization on the grid. Subscribe wherever you get your podcasts.

Sage has entered into a land use agreement with San Miguel Electric Cooperative Inc. (SMECI) for the 3 MW Geopressured Geothermal System (GGS) energy storage facility. The 3 MW EarthStore system will be in Christine, Texas near the SMECI lignite coal power plant. Sage will operate as a merchant, buying and selling electricity to the ERCOT grid.

Later this year, Sage will launch the EarthStore facility, which it says will utilize the earth’s “natural capacity for energy storage” to produce dispatchable electricity on demand through a power source that works independent of weather conditions.

“Once operational, our EarthStore facility in Christine will be the first geothermal energy storage system to store potential energy deep in the earth and supply electrons to a power grid,” said Cindy Taff, CEO of Sage Geosystems. “Geothermal energy storage is a viable solution for long-duration storage and an alternative for short-duration lithium-ion batteries. Electric utilities and co-ops like SMECI, will be able to use our technology to complement wind and solar, and stabilize the grid.”

The facility will use Sage’s proprietary technology to store energy, targeting 6-to-10-hour storage durations and delivering a round-trip efficiency (RTE) of 70-75%, Sage said. In addition, water losses are targeted to be less than 2%. At scale, this energy storage system will be paired with renewable energy to provide baseload and dispatchable power to the electric grid. When combined with solar power, Sage’s EarthStore facility enables 24/7 electricity generation at a blended Levelized Cost of Energy (LCOE) well under $0.10/kWh, it said.

“Long-duration energy storage is crucial for the ERCOT utility grid, especially with the increasing integration of intermittent wind and solar power generation,” said Craig Courter, CEO, San Miguel Electric Cooperative. “We are excited to be part of this innovative project that showcases the potential of geothermal energy storage.”

Sage will be applying for two drilling permits in Texas. The first permit is in Atascosa County for the EarthStore facility in Christine and the second permit is in Starr County, adjacent to the company’s existing test well.

Geothermal electricity generation taps high-energy-content steam at temperatures of 300-700 degrees Fahrenheit and requires drilling to depths that are as much as tens of thousands of feet below the surface.

The process works by drilling sets of both injection wells and production wells. Cold water is pumped down the injection well and then flows through the geothermal reservoir to the production well. The water returns to the surface at a high enough temperature for the energy to be captured at the surface and enter an electric generation cycle.

GO DEEPER: Fervo Energy co-founder and CEO Tim Latimer joined the Texas Power Podcast with Doug Lewin to discuss a hoped-for resurgence in the geothermal energy industry. Subscribe wherever you get your podcasts.

Compared to older, traditional geothermal energy sites, it’s much more challenging, and expensive, to find heat resources suitable for electricity generation today. That’s why companies like Fervo Energy and Sage are incorporating techniques from the oil and gas industry to give the geothermal industry new life.

Although Texas doesn’t have any geothermal projects of its own yet, several companies headquartered in Houston, including Fervo Energy and Sage, are hoping to change that. Some former oil and gas industry professionals are now championing geothermal as a new resource for reliability, especially given the crossover between equipment and techniques from the oil drilling industry, the Texas Tribune reports.

In their respective second-quarter earnings reports, NRG Energy and Vistra discussed potential opportunities for data center co-location.

NRG’s 21 generating sites are “ideally suited for new large loads and power plant development, offering co-location opportunities both behind and in front of the meter,” said NRG President and CEO Larry Coben on the company’s earnings call Thursday.

Coben said NRG’s facilities would be attractive to data center developers for their access to water for cooling, premium fiber channel access for low latency and existing grid access for rapid market entry. NRG’s fleet includes a mix of natural gas, renewables and coal.

“We were getting lots of people sort of throwing us bids for our sites,” Coben told investors.

He continued: “We know they think we’re just a bunch of power guys who don’t know anything about data centers. So, if that’s what they’re bidding us, we really need to look at this, because it means there’s a lot more value in there than the bids that we’re receiving.”

Regarding discussions with data center providers and any potential co-location deals, Coben said NRG was working on a strategy and would release more details later in 2024.

The concept of large loads co-locating with generation continues to draw interest. The most-watched proposal would result in the co-location of an Amazon Web Services (AWS) data center at Talen Energy’s Susquehanna nuclear plant in Pennsylvania.

Multiple utilities protested the proposed Talen Interconnection Service Agreement (ISA), prompting FERC to call for a technical conference in the fall to discuss the larger issue of co-location.

For Vistra, the pending Talen case or upcoming FERC technical conference “has not slowed the conversation down” on potential data center co-location deals, said company President and CEO Jim Burke.

“We’re in due diligence for a number of sites,” Burke told investors on the company’s Q2 call. “This is a really big opportunity for our industry to meet customer needs.”

Vistra reiterated the company can provide data centers the speed to market advantage since there wouldn’t be the same level of buildout needed on the transmission side.

“I think there’s going to be plenty of data center load behind-the-meter or co-located, and also front of the meter,” Burke said.

On planning for load growth and building new gas plants

The industry’s rapid load growth is being driven by data centers, electrification and new manufacturing. This is compounded by the retirement of fossil-fired plants. As a result, both NRG and Vistra see emerging supply gaps and tightening markets.

Among the regions expected to experience a surge in demand, ERCOT’s current long-term load forecast shows peak demand increasing from 86 GW in 2024 to 137 GW in 2028. This load growth will require significant planning and construction of new generation and transmission.

While NRG and Vistra operate plants outside of Texas, most of their growth is taking place in the ERCOT market. Both companies are taking advantage of the Texas Energy Fund (TEF), a government low-interest loan program used to incentivize the development of more dispatchable generation and smaller backup power in the state.

NRG has filed TEF loan applications for three separate projects, totaling more than 1,500 MW of capacity. Thee company would begin construction on two of the three facilities as early as October of this year.

One of these projects is a new 689 MW natural gas combined-cycle unit with Mitsubishi Power M501JAC equipment, located at NRG’s Cedar Bayou plant in Baytown, Texas. The target completion date would be late-2027.

The 415 MW simple-cycle unit at TH Wharton would include Siemens Energy’s SGT6-5000F equipment and could come online by mid-2026.

Finally, the 443 MW simple-cycle unit at Greens Bayou would be powered by a GE 7HA.03 turbine and could be finished by mid-2028.

“We believe our projects are well-situated for a timely approval, given their shovel-ready nature and the completeness of the applications that we submitted,” said Coben.

Texas Lt. Gov. Dan Patrick recently said 81 applicants representing over 41 GW of dispatchable power had applied through the fund, as of May 31. Patrick said the state planned on expanding the program during the next legislative session.

Coben told investors NRG could apply for more loan funding in a potential second TEF round, but also noted the challenge of multi-year lead times for turbines and other equipment.

“If you don’t have a place in the turbine queue today, there’s no way you’re getting a new project online before 2030, at the earliest,” he said.

In May, Vistra announced plans to add up to 2,000 MW of natural gas-fired capacity in West, Central and North Texas.

860 MW of simple-cycle peaker plants would support West Texas, including the state’s growing oil and gas industry. The company is seeing multiple demand drivers, including data centers and the electrification of oil field operations, specifically the Permian Basin of West Texas

Vistra would also convert its coal-fired Coleto Creek plant near Goliad to natural gas after the plant retires in 2027. Repowering would enable up to 600 MW of gas-fired capacity.

Also included are 500 MW of augmentations at existing facilities, nearly half of which are already finished, Burke said on the Q2 earnings call.

In its quarterly report, Vistra leadership noted the industry continues to experience supply chain constraints and labor shortages that have reduced the availability of certain equipment needed for the construction of renewables projects. As a result, Vistra has deferred some of planned capital spend for these projects, the company said in its 10-Q filing.

The company did announce two long-term power purchase agreements (PPAs) with Amazon and Microsoft for two new large-scale solar facilities.

Supply chain disruptions have also increased the lead times to procure certain materials necessary to maintain Vistra’s natural gas, nuclear and coal fleet, according to the filing.

“We have proactively engaged our suppliers to secure key materials needed to maintain our existing generation facilities prior to future planned outages,” the company reported.

In its Q2 report, NRG said procuring mid to long-term generation through PPAs continues to be part of its strategy. The company has entered into renewable PPAs totaling nearly 1.9 GW with third-party developers, all of which were operational as of July 31.

Georgia Power is celebrating Generation Appreciation Month, a time to recognize the more than 1,100 team members who “work tirelessly in power plants across state to keep reliable energy flowing to the grid on hot summer days, cold winter mornings and every hour in between.”

“In life, as well as with Georgia Power’s power generation facilities, there is no one-size-fits-all option,” said Rick Anderson, senior vice president and senior production officer for Georgia Power. “From the existing facilities that have powered Georgia for decades, to newer sources of generation such as renewable energy, cleaner natural gas and battery storage, Georgia Power’s diverse generation mix continues to evolve to meet the needs of a growing Georgia. To keep the energy flowing, we need a workforce that is just as advanced and diverse.”

Based on available opportunities, a career in power generation offers many possibilities for those who join the team, Georgia Power said. Career paths exist in the areas of operations, maintenance, electrical, instrumentation, engineering and more. Last year, the company hired over 80 team members across generation facilities and expects the hiring trend to continue in the coming years. Strong training programs exist in Operations, along with apprenticeships in Mechanical and Electrical, which develop experienced journeymen who work safely to keep energy flowing to the grid, 24/7.

Georgia Power also highlighted the “continuous learning” it offers, including the Rockmart training facility where electrical, mechanical, and instrumentation and control technicians hone their skills each year. In 2023, this facility conducted nearly 3,000 hours of both hands-on and classroom instruction. Subject matter experts from both Southern Company and external entities visited to assist in this training program.

The U.S. Department of Energy (DOE) conducted supply chain “deep dives” on renewable energy technologies, including hydropower and large power transformers. Since the deep dives were published, the Water Power Technologies Office (WPTO) has focused on improving its understanding of the hydropower supply chain and developing strategies for addressing supply chain challenges. The report, Hydropower Supply Chain Gap Analysis, was prepared by NREL for DOE and WPTO.

Because the challenges outlined in the deep dives are most acute for large systems greater than 100 MW, NREL’s report focuses on large systems but expects that its recommendations will improve the supply chain for all hydro systems regardless of scale. Additionally, since the federal government owns almost 50% of the nameplate capacity for conventional hydropower systems with 40% (18 GW) of these units being at least 100 MW, the federal fleet is used to prime the development of the supply chain for the rest of the industry, NREL said.

State of the supply chain

The analysis focused on the upstream and midstream sectors of the hydropower supply chain, as they have “limited” domestic capacity, NREL said.

Upstream supply chain components include raw material extraction, concentration, and processing into engineered materials. The U.S. has strong iron mining and steel production capabilities, NREL said, but it has limited to no mining of the trace metals used in steel, and it imports more than 40% of its copper. Additionally, there are only two domestic facilities with forging capabilities for large hydropower shafts (50-75 tons) and a single domestic foundry that can cast large turbine runners greater than 10 tons.

In the midstream supply chain, the first stage is composed of the manufacture and assembly of hydropower components like hydrogenerators and turbines. Some U.S. companies manufacture components, but international competition is “intense,” NREL said, and acquiring components for 100-MW or larger systems is difficult to procure domestically — only one foundry is capable of producing castings greater than 10 tons, and no domestic manufacturers exist for hydrogenerators greater than 20 MW.

Gap analysis

Five “major” gaps in the domestic hydropower supply chain were identified in the report.

1. Unpredictable and variable demand signals

The development of a domestic hydropower supply chain is held back by an unpredictable and highly variable demand for materials and components, NREL said. Hydropower systems typically have long lives, so replacements and refurbishment schedules have cycles that last years or decades.

2. ‘Severely’ limited or nonexistent domestic suppliers for hydropower
materials and components

There are no domestic facilities for hydrogenerator manufacturing greater than 20 MW, and a single facility for less than 20 MW.

The following materials and components only have a single domestic facility or supplier:

• Windings greater than 100 MW for large hydrogenerators
• Large forgings (50-75 tons) for large hydropower shafts
• Foundry with casting capabilities greater than 10 tons for large turbine runners
• Grain oriented-electric steel (GOES) for U.S. transformer manufacturers

Additionally, there are two domestic suppliers of non-oriented electric steel (NOES) for U.S. hydrogenerator manufacturers

3. Federal contracting procedures and domestic content laws

The report identified several procurement regulators and/or general practices that NREL says inhibit the development of the domestic hydropower supply chain, including bonding requirements, specifying pre-contract design work, all-inclusive contracts, and focusing exclusively on the initial capital outlay rather than the total project life cycle cost.

4. Foreign competition, foreign subsidies, and ‘ineffective’ trade policies

NREL said discussions with companies in the hydropower industry highlighted “inequitable” competition from foreign companies and “ineffective” trade policies as other issues in the hydropower supply chain.

Several companies noted that other countries subsidize their steel industries, and China develops “pods” of manufacturing capability to shorten the supply chain, making it more cost-effective.

5. Shortage of skilled workers

Hydropower manufacturing and upstream support industries suffer from a “significant” lack of workers with appropriate expertise, the report said. These industries have been offshored over the last 40 years, leaving skilled workers to retire or move to other industries.

NREL’s recommendations

NREL said DOE and the WPTO should consider the following recommendations to address hydropower supply chain concerns:

Lead with the federal fleet to prime the development of an aggregated, consistent demand signal with the largest producers by examining federal procurement processes and developing best practices for the refurbishment of the domestic fleet. Improve federal procurement processes to include multi-entity or multi-project long-term contracts and ensure that small businesses can compete for federal contracts. Develop best practices for refurbishments to ensure a predictable, steady, demand.

Develop domestic supply chain and end-user datasets to increase awareness of current and expanding capabilities of the domestic supply chain and installed hydropower fleet. WPTO is funding the development of two databases at Oak Ridge National Laboratory: a comprehensive database of suppliers in the hydropower supply chain, and an expansion of the HydroSource tool to provide unit and component-level information on the existing domestic fleet.

Work with other low-carbon technologies to create a “significant,” steady, and predictable demand signal for common materials.

Continue workforce development, including continuing collegiate competitions like the Hydropower Collegiate Competition and Marine Energy Collegiate Competition; in addition to acting on recommendations from the Hydropower Workforce report.

Originally published in Hydro Review.

In the U.S., most power plants begin increasing their coal stocks in the spring to prepare for the higher demand in the summer and winter. Additionally, U.S. power plants typically stockpile much more coal than they consume in a month, EIA said, with more than 90% of coal-fired power plants currently having enough coal to generate electricity for 60 days or more.

Coal-fired electricity has declined in the U.S. over the past decade, and coal plant stockpiles have been declining as well, EIA said. Coal consumption by the electric power sector totaled 385 million tons in 2023, 43% less than in 2016. Coal stockpiles reached 131 million tons by the end of 2023, 19% less than stockpiles at the end of 2016.

The amount of coal transported in the United States decreased 8% in 2023, continuing a trend in which coal shipments have generally decreased over the past two decades as coal’s share of power generation has declined in the United States. The amount of coal transported to power plants, which are often located far from mines, decreased by more than half, falling from 957 million tons in 2010 to 422 million tons in 2023.

However, EIA expects the decline in coal consumption to reverse this year. In its recently published July update to the Short-Term Energy Outlook, EIA forecast an increase in use of coal to generate electricity in the United States this year, with use dropping back to about 2023 amounts in 2025.

Although the amount of coal being transported closely follows the coal consumption rate, the two measurements can differ from year to year. During 2023, U.S. coal producers shipped 35 million more tons (9%) than U.S. power plants consumed. Surplus deliveries last year boosted inventory levels at power plants by 48%, reducing deliveries in early 2024. Conversely, coal shipments to power plants in 2021 and 2022 were 59 million tons less than the amounts consumed during those two years, and inventories dropped to less than 100 million tons.

Also, in late 2023, EIA projected that coal-fired power plants will generate less electricity in 2024 (599 billion kwh) than the combined generation from solar and wind (688 billion kWh) for the first time on record.

PJM Interconnection, the largest electrical grid operator in the United States, held its annual power market auction Tuesday, and the results are staggering.

The auction produced a price of $269.92/MW-day for most of the PJM footprint, compared to $28.92/MW-day for the 2024/2025 auction. Capacity auction prices fluctuate annually based on the need for investment in generation resources, but a more than 800% increase will have a massive ripple effect across PJM’s 13-state footprint.

“PJM’s capacity auction has competitively secured resources to meet the RTO reliability requirement for the 2025/2026 Delivery Year,” reads PJM’s press release. That is a true statement, I suppose.

The auction secured 135,684 megawatts for the period from June 1, 2025, through May 31, 2026. The power mix from generators included 48% gas, 21% nuclear, 18% of coal, 1% of solar, 1% of wind, 4% of hydro, 5% of demand response, and 2% from other resources, PJM said. The total Fixed Resource Requirement (FRR) obligation is an additional 10,886 MW for a total of 146,570 MW. The total procured capacity in the auction and resource commitments under FRR represents an 18.5% reserve margin, compared to a 20.4% reserve margin for the 2024/2025 Delivery Year.

“The significantly higher prices in this auction confirm our concerns that the supply/demand balance is tightening,” PJM CEO Manu Asthana said. “The market is sending a price signal that should incent investment in resources.”

How did we get here?

The short explanation behind the price hikes: supply and demand. A longer line of reasoning includes insufficient future transmission planning, the retirement of fossil fuel generation, long interconnection queues, and the implementation of FERC-approved market reforms.

According to PJM, the drivers of higher prices in this auction include:

• Decreased supply offers into the auction due mainly to generator retirements
• Increase in projected peak load
• FERC-approved market reforms, including improved reliability risk modeling for extreme weather and accreditation that more accurately values each resource’s contribution to reliability

National trade association Advanced Energy United points out PJM scored a “D-” in a recent scorecard of how all grid operators are managing “generator interconnection,” the process of connecting energy projects to the power grid. PJM’s interconnection process was going so poorly it shut down its interconnection queue until sometime in 2025. Hundreds of projects are still stuck waiting in line. A 2023 report from Americans for a Clean Energy Grid graded PJM a “D” for its process of building new transmission lines, which are needed to connect energy projects to population centers.

“Electricity prices are skyrocketing because the grid operator PJM is failing to plan for the kind of energy infrastructure we need to affordably keep the lights on,” said Jon Gordon, Director at Advanced Energy United. “PJM didn’t prepare for an energy transition we all saw coming, and now consumers are going to pay the price.”

“PJM fell behind on interconnection and long-term transmission planning years ago, and now the problems are just cascading and piling up,” added Gordon, who leads United’s engagement with PJM. “With transmission planning improvements on the docket and further interconnection reforms urgently needed, these auction results should send a clear message that change can’t come too soon.”

Is change coming?

The price increase within PJM’s service territory is set to take effect in June 2025. Capacity prices are one component of wholesale costs that ultimately get factored into the price paid by end-use customers; electric bills also reflect the cost of other wholesale services like energy and transmission, as well as distribution services, state programs, and other fees.

The total amount of supply resources in the auction decreased again this year, continuing a trend across recent auctions and underlining PJM’s stated concerns about generation resources facing pressure to retire without replacement capacity being built quickly enough to replace them. About 6,600 MW of generation have retired or have must-offer exceptions (signaling intent to retire), compared to generators which offered in the 2024/2025 Base Residual Auction (BRA).

Meanwhile, the peak load forecast for the 2025/2026 Delivery Year has increased from 150,640 MW for the 2024/2025 BRA to 153,883 MW for the 2025/2026 Delivery Year. Additionally, FERC-approved market reforms contributed to tightening the supply and demand balance by better estimating the impact of extreme weather on load and more accurately determining resource reliability value.

These reliability concerns associated with reducing supply and increasing demand are not limited to PJM; the North American Electric Reliability Corporation has identified elevated risk to the reliability of the electrical grid for much of the country outside of PJM.

To facilitate the entry of new resources, PJM is implementing its FERC-approved generation interconnection reform, with approximately 72,000 MW of resources expected to be processed in 2024 and 2025. However, PJM remains concerned with the slow pace of new generation construction. Approximately 38,000 MW of resources currently have already cleared PJM’s interconnection queue but have not been built due to external challenges, including financing, supply chain, and siting/permitting issues.

“Interconnection process reform is proceeding, but hurdles remain for many projects outside of our process,” said Stu Bresler, executive vice president of market services and strategy. “We are considering ways to accelerate those who can successfully overcome those challenges and build.”

Auctions are usually held three years in advance of the delivery year. The 2025/2026 auction was originally scheduled to be held in May 2022, but auctions had been suspended while FERC considered approval of new capacity market rules. PJM has compressed its auction calendar to return to a three-year-forward basis. The next BRA, for the 2026/2027 Delivery Year, is currently scheduled for December 2024.

A detailed report of the auction is available on PJM’s capacity market page.

Problem: Steam turbines generate most of the world’s electricity, and approximately 42% in the US_[1]. Keeping them in operation is vital. Condensation in the low-pressure stage can result in corrosion pitting and corrosion fatigue. These failure mechanisms are two of the most common factors impacting repair and operating expenses. When cracks begin forming at the site of these mechanisms, the component, often a blade, must be replaced. Between the actual component replacement cost and the downtime required, the replacement process can cost millions of dollars. Sometimes replacement blades are new, but they’re often refurbished blades that have been weld-repaired and returned to service. This leads to the recurrence of many failures as condensation and resulting corrosion damage usually form in the same areas_[2].  

The primary way to address corrosion damage is by minimizing the chance of it forming. Martensitic stainless steels are often utilized in the production of parts because of the mild corrosion resistance offered by chromium_[3]. Coatings are commonly applied to provide further resistance. Shallow compression is provided by shot peening. Operators attempt to control the chemistry of the vapors entering the steam turbines to minimize impurities_[4]. All of these efforts offer protection, albeit with some disadvantages. Resistance through material selection is mild. Coatings wear over time and eventually require re-application. Surface damage can easily penetrate the relatively shallow layer of compression provided by shot peening. Ridding the vapors of impurities is challenging and offers no guarantee that corrosion will not still form.

Solution: Engineered compression has been proven to significantly improve the damage tolerance of many materials and components. This study examines the use of deep-engineered compression to combat corrosion pitting and corrosion fatigue in Alloy 450, a martensitic stainless steel widely employed in steam turbine blade manufacturing.

Specimen Design

Fatigue specimens were specially designed to test the benefits of compressive residual stress in 4-point bending. Samples were finished machined using low stress grinding (LSG). To simulate surface damage from any source (handling, FOD, corrosion pitting, or erosion), a semi-elliptical surface notch with a depth of a_o = 0.01 in. (0.25 mm) and surface length of 2c_o = 0.06 in. (1.5 mm) was introduced by electrical discharge machining (EDM). EDM produces a pre-cracked recast layer that is in residual tension at the bottom of the notch, producing a large fatigue debit with a high k_f.

Processing

Low plasticity burnishing (LPB®) was selected to impart the engineered compression due to the depth and stability of compression, as well as the ease of application. Process parameters were developed to impart a depth and magnitude of compression on the order of 0.04 in. (1 mm), sufficient to mitigate the simulated damage. Figure 1 shows a set of eight fatigue specimens in the process of being low plasticity burnished on the four-axis manipulator in a CNC milling machine.

Testing

Active corrosion fatigue tests were conducted in an acidic salt solution containing 3.5 wt% NaCl (pH = 3.5). At the start of cyclic loading, filter papers soaked with the solution were wrapped around the gauge section of the fatigue test specimen and sealed with a polyethylene film to avoid evaporation. There was no exposure to the corrosive solution before the fatigue tests. LPB and LSG baseline samples were tested with and without EDM damage. A few LPB samples were tested with increased damage levels of 2x to analyze the treatment’s effectiveness with deeper damage.

X-ray diffraction residual stress measurements were made to characterize the residual stress distribution from LPB. The results of these measurements are shown in Figure 2. Maximum compression is nominally -140 ksi (-965 MPa) at the surface, decreasing to zero over a depth of about 0.035 in. (0.89 mm). The corrosion fatigue performance in acidic NaCl solution is shown in Figure 3. The LSG baseline condition is compared with LPB with and without the EDM notch. With no notch, the baseline fatigue strength at 10⁷ cycles is nominally 100 ksi (689 MPa). The 0.01 in. (0.25 mm) deep EDM notch decreases the baseline fatigue strength to approximately 10% of its original value. The fatigue lives at higher stresses show a corresponding decrease of over an order of magnitude resulting from the notch. Unnotched LPB processed samples have a fatigue strength of about 160 ksi (1100 MPa). The notch had a marginal effect on the LPB fatigue strength, reducing it to 125 ksi (862 MPa), well above the fatigue strength of the undamaged baseline specimens. LPB-treated samples containing the 2x damage depth had fatigue lives comparable to undamaged LSG specimens within the limits of experimental scatter.

Conclusion

LPB imparted highly beneficial compressive residual stresses on the surface, sufficient to withstand pitting and/or surface damage up to a depth of nominally 0.02 in. (0.51 mm). LPB resulted in more than a 50% increase in corrosion fatigue strength without surface damage and a 12x increase in strength with 0.01 in. (0.25 mm) deep damage. The depth and magnitude of surface compression are responsible for improving fatigue strength.

The application of LPB effectively enhances corrosion damage tolerance, as shown by the improved fatigue strength even in the presence of simulated damage. The process has been used successfully in many power applications since the early 2000s. Implementing engineered compression with LPB significantly improves the durability and performance of steam turbine components, ultimately reducing costs associated with maintenance and downtime.

References

[1] US Energy Information Administration, “How Electricity is Generated.” https://www.eia.gov/energyexplained/electricity/how-electricity-is-generated.php October, 2023.

[2] R. Ravindranath, N. Jayaraman & P. Prevey, “Fatigue life Extension of Steam Turbine Alloys Using Low Plasticity Burnishing (LPB).” Proceedings of ASME Turbo Expo 2010: Power for Land, Sea and Air. Glasgow, UK, June 14-18, 2010.

[3] A. Rivaz, S.H. Mousavi Anijdan, M. Moazami-Goudarzi, “Failure Analysis and Damage Causes of a Steam Turbine Blade of 410 Martensitic Stainless Steel After 165,000 H of Working.” Engineering Failure Analysis, Volume 113, 2020.

[4] Zhou, S, Turnbull, A, “Steam Turbine Operating Conditions, Chemistry of Condensates, and Environment Assisted Cracking – A Critical Review.” NPL Report MATC (A) 95, May, 2002.

About the Author: As Research Engineer for both the Surface Integrity and Process Optimization (SIPO) laboratory and the Corrosion Characterization laboratory at Lambda Research, Kyle Brandenburg is part of a team responsible for providing materials testing solutions to clients. Additionally, the SIPO and Corrosion labs conduct in-house research and testing pertaining to the surface enhancement and optimization of materials and components. Laboratory capabilities include high and low cycle fatigue studies, DC electrochemical corrosion testing, stress corrosion cracking, and supporting capabilities like hardness testing, heat treating, SEM and metallographic analysis, and shot peening.

kbrandenburg@lambdatechs.com

www.lambdatechs.com