PJM Load Forecast Continues to Fall for 2014, As It Does Every Year

PJM’s draft load forecast for 2014 is out.  This is just the draft forecast, and may be adjusted, but once again, we see PJM’s always optimistic engineers revising their forecasts downward.  PJM’s forecasts of demand in western PJM are subject to particularly significant downward revisions.

Remember in 2009 when PJM was predicting a big jump in demand when “the economy recovers?”  Well, demand didn’t jump, and the economy didn’t recover.  And, as we know, economic growth has decoupled from electricity demand anyway.

Here’s what PJM says, with my comments added:

Revisions to historical economic data and the addition of another year of load experience to the model have resulted in generally lower peak and energy forecasts in this year’s report, compared to the same year in last year’s report.

PJM does note some trends that resulted in higher demand, but these trends still could not overcome the significant demand reduction across the region.

The forecasts of the following zones have been adjusted to account for large, unanticipated load changes (see Table B-9 for details):

  • AEP: the loss of an aluminum smelter decreases the summer peak by 370 MW in all years;[Century Aluminum has been closed for three years.  Why were they still including it anyway?]
  • APS: rapid expansion of load to serve hydraulic fracturing facilities adds 80-120 MW to the summer peak;[This is apparently to cover power use in pipelines and compressor stations for new gas in western PA and Mon Power’s service area in WV.]
  • BGE: an undisclosed project currently under construction adds 120-315 MW to the summer peak;
  • DOM: substantial on‐going growth in data center construction adds 288-896 MW to the summer peak. [See my earlier post here about server farms in Northern East Virginia.]

Here is what PJM says about the revisions to its summer peak forecast, compared with last year’s forecast:

Compared to the 2013 Load Report, the 2014 PJM RTO summer peak forecast shows the following changes for three years of interest:

  • The next delivery year – 2014  -1,309 MW (-0.8%)
  • The next RPM auction year – 2017 -2,771 MW (-1.7%)
  • The next RTEP study year – 2019 -3,450 MW (-2.0%)

A revision of almost a whole percentage point in just one year shows just how bad the PJM model is at projecting demand.  Here is an illustration of what this bad projection looks like from PJM’s AE zone, which includes Mon Power in WV, summer peak graph:

2014 PJM load graphBack in 2008, PJM and AEP/Allegheny were screaming hysterically about how PATH was needed to keep up with rapidly rising demand.  Well, that didn’t happen.  PJM has revised its 15 year forecasts downward every year since then.


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