Wind Power

Wind Power Interconnection Agreement

In a move that will benefit the burgeoning wind power industry, PJM Interconnection has adopted rules to allow wind power to compete on an equal basis with traditional electricity generators. For the first time, wind generators will receive capacity credits.

Valley Forge, Pennsylvania – April 25, 2003 [SolarAccess.com] Capacity credits are awarded based on the commitment to provide electricity to PJM and the performance of generation when called upon by PJM dispatchers. PJM operates the high-voltage electric power grid and balances electricity supply and demand in seven states and the District of Columbia. PJM members that serve end-use customers must have access to enough generating units to supply electricity to customers as fast as they use it even on peak-demand days. Members meet their obligations with generators they own or with capacity credits they purchase from generators. Under the rule change, wind generators will receive capacity credits that they can sell to entities serving end-use customers. The sale of the capacity credits provides another source of income to the generators. “Encouraging renewable resources through appropriate rules benefits the grid because having more and diverse sources of generation improves reliability and makes the market even more robust,” said Steven R. Herling, PJM executive director of system planning. “We’re applying a fair and practical method to allow wind turbines to provide generating capacity to the wholesale market.” The capacity credits are based on a wind-turbine facility’s actual performance. The credit is a three-year rolling average of a unit’s output during PJM’s peak-use hours. Peak-use hours are between 3 p.m. and 6 p.m. during June, July and August. For units with less than three years’ operating experience, a “class average” credit would apply. The class average is 20 percent of a wind turbine’s rated capacity. The average is based on the operating experience of wind turbines in use in the region and will be updated, periodically, as more wind generation is added to the PJM system. The PJM Reliability Assurance Agreement Reliability Committee, consisting of PJM members, approved the rule change. The new capacity credit rule for wind power goes into effect June 1, 2003. PJM, the country’s first fully functioning regional transmission organization, operates the world’s largest competitive wholesale electricity market. The company currently coordinates a pooled generating capacity of more than 74,000 MW and operates a wholesale electricity market with more than 200 market buyers, sellers and traders of electricity.