Welcome to Grid Brief! Here’s what we’re looking at today: a market design flaw may have added billions to the cost of the latest PJM auction, what does the nuclear industry want after the ADVANCE Act, and politics delays permitting legislation.

Report: Design Flaws Added Billions to Cost of Latest PJM Auction

A new report from Monitoring Analytics estimates that structural flaws in PJM’s market design led to billions of dollars in increased costs during the RTO’s capacity auction in July. The report is part one of two and relies on a series of assumptions, but these assumptions “show the ‘direction and magnitude’ of the effect of certain factors in the PJM capacity market design,” reports Ethan Howland of Utility Dive.

One of the key findings of the report focuses on PJM’s rules that exempt renewables and energy storage from the auction’s must-offer requirement. According to Monitoring Analytics, this policy increased auction revenues by $4.1 billion.

In a February 2023 memo to PJM the firm wrote, “The failure to apply the must offer requirement [to renewables] will create increasingly significant market design issues and market power issues in the capacity market as the level of capacity from intermittent and storage resources increases and the level of demand side resources remains high.”

Interestingly, Monitoring Analytics also wrote that, if these intermittent sources are given a must-offer obligation, their owners should not be forced to pay a penalty when these resources don’t perform.

In an initial statement, PJM—which will publish a formal response to the Monitoring Analytics report later in “the near future”—called the findings not credible.

What Does the Nuclear Power Industry Want After the ADVANCE Act?

Earlier this year, President Biden signed the Accelerating Deployment of Versatile Advanced Nuclear for Clean Energy (ADVANCE) Act into law. The most comprehensive nuclear bill since the Nuclear Energy Innovation and Modernization Act (NEIMA) of 2019, the ADVANCE Act included several provisions to reduce permitting and licensing timelines, lower costs for construction, and increase international collaboration.

While a good bill overall, the ADVANCE Act failed to address several regulatory barriers that inhibit nuclear power in the U.S. With more substantial pro-nuclear legislation unlikely to pass in this Congress, the industry is organizing its legislative priorities for next year.

One thing that industry leaders are eyeing is the uncontested mandatory hearing, according to Brian Martucci of UtilityDive.

Mandated under the Atomic Energy Act (AEA), the uncontested mandatory hearing requires the Nuclear Regulatory Commission to conduct a public hearing with the agency’s commissioners before issuing a combined license. This hearing takes place after years of exhaustive public and local engagement including other hearings, public comments, and regulatory reviews. Uncontested mandatory hearings can cost developers millions of dollars and delay projects by months. The NRC recently voted to conduct these hearings via written comments to save time and money. Until this provision of the AEA is repealed altogether by Congress, it will continue to delay timelines and increase the cost of nuclear power.

Tomorrow, as a part of National Clean Energy Week, a panel of industry leaders will dive into what else is needed for nuclear power after the ADVANCE Act. Register to listen to that discussion here.

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Conversation Starters

• Demands for permitting legislation begin to add up (E&E News)

  With momentum for a comprehensive permitting package beginning, more lawmakers are wanting a piece of the pie which is making passage of a bill by the end of the year seem unlikely. On the Republican side, lawmakers are concerned about provisions for transmission. Many Democrats, meanwhile, are holding out for further inclusion of offshore wind projects.

• ARPA-E awards startup $1.72 million to spur nickel phytomining in the U.S. (Carbon Herald)

  Metalplant specializes in phytomining, which is essentially mining with plants, allowing photosynthesis to power the purification of nickel from low to high grades. While nickel is designated as a critical mineral, the U.S. does not have a robust domestic supply chain for it.

• The clean jet fuel winning over Wall Street (The Wall Street Journal)

  Twelve, a startup developing clean jet fuel technology, has raised $645 million in funding, valuing the company at over $1 billion and marking one of the largest investments in the sustainable aviation fuel sector. The company uses a process mimicking photosynthesis to produce jet fuel with up to 90% lower emissions than conventional fuel, utilizing carbon dioxide, water, and renewable electricity.

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