Welcome Grid Brief! Here’s what we’re looking at today: PJM dings Winter Storm Elliott non-performers, the EU kicks off its “carbon club,” Biden’s offshore drilling scheme angers all sides, and more.

PJM Punishes Non-Performers

PJM, America’s largest power market, filed a settlement package with the Federal Energy Regulatory Commission last week.

“PJM and 80 other settling parties today filed a settlement package to comprehensively resolve 15 separate Federal Energy Regulatory Commission complaints regarding extraordinary non-performance charges resulting from Winter Storm Elliott on Dec. 23 and Dec. 24, 2022,” reads a statement from PJM.

In short, PJM is dinging energy providers who sold available capacity for Winter Storm Elliott but then failed to provide that power. PJM’s move speaks to the wisdom of its seasonal capacity markets which allowed PJM to enforce responsibility for keeping the lights on.

Power market advocates have pointed out that PJM, unlike its traditional monopoly utility neighbors who actually blacked out during the storm, has dished out punishment for non-performance.

FERC and the North American Electric Reliability Corp. have recently released a report on the failures in the gas system that led to the Elliott blackouts in the Southeast. You can read more about that here.

Europe Takes Its War On Carbon Global

The European Union wants to push the rest of the world into its climate commitments using a new levy.

“The measure will eventually place a levy on carbon-intensive imports so that European companies forced to comply with the continent’s strict climate laws won’t face unfair competition from producers outside the bloc,” reports Bloomberg. “From Sunday, the start of the first phase of the so-called Carbon Border Adjustment Mechanism, importers from six carbon-intensive industries will be required to start reporting on their emissions.”

But the EU has significant challenges ahead to ensure the smooth operation of the mechanism, including overseeing compliance in member states and implementing more sophisticated technical regulations. Plus, it is anticipated to encounter legal hurdles at the WTO and conflicts with its trading partners.

The EU’s move has already triggered tensions with the US, who has asked that its aluminum receive exemption from the levy. Russia and China have also decried the move, arguing that it violates free trade principles.

Share Grid Brief

We rely on word of mouth to grow. If you're enjoying this, don't forget to forward Grid Brief to your friends and ask them to subscribe!

Biden Offshore Drilling Plan Disappoints

President Joe Biden has managed to anger both sides of the fossil fuel debate with his recent offshore drilling plan. Environmentalists complained that holding any sales for offshore drilling exacerbates climate change; the industry complained that the skimpy sales will raise fuel prices.

“The criticism from both sides reflects the difficulty Biden's White House has had in dealing with U.S. oil extraction policies, as it seeks to balance national energy security with the need to cut greenhouse gas emissions to fight climate change,” reports Reuters. “Biden had promised on the campaign trail to end new federal leasing, but has been blocked by the courts from doing so, and discouraged by rising pump prices that political analysts say could hurt his chances of reelection.”

The Department of the Interior will offer three sales all located in the Gulf of Mexico. That’s the lowest number of sales since 1980.

Conversation Starters

• Green groups call for more regulation on coal dust from trains. “Sierra Club and other environmental groups want the Environmental Protection Agency to compel freight railroads to curb the coal dust that flies off of open-top rail cars. The groups argue that heavy metals and chemicals such as arsenic, cadmium, chromium and mercury can potentially disperse from the coal trains, thus harming the local environments where trains pass through,” reports Freight Waves. “To reduce or prevent coal dust from traveling rail cars, the groups have filed a rulemaking petition with EPA to require coal train operators to obtain a permit under the Clean Water Act’s (CWA) national pollutant discharge elimination system (NPDES).”

• Russia’s diesel export ban moves ahead. “Russia is appearing to make good on its diesel export ban in October, with loadings from Russian ports on the Black and Baltic Sea set to drop to near nothing for next month,” reports Oilprice.com. “Russia announced in September a ban on most diesel exports from its western ports in an effort to stabilize fuel prices at home, but later lifted the ban on low-quality diesel. Russia is eagerly pursuing measures that would stave off a repeat of the 2018 fuel crisis. In November 2018, Russian President Vladimir Putin saw his approval ratings drop to a low not seen in six years, mainly due to higher prices at the pump, which saw a 7% increase since May.”

• Turkey raises energy prices for industrial customers. “Turkey's state energy importer BOTAS said it hiked the natural gas price by 20% for small- to medium-sized industrial customers and by 20% for large industrial users,” reports Reuters. “The price of gas used for electricity production was also raised by 20%, BOTAS said.”

Crom’s Blessing

Interested in sponsoring Grid Brief?

Email [email protected] for our media kit to learn more about sponsorship opportunities.