Properly over half of North America faces a possible scarcity of electrical energy provides within the coming years, compounded by surging demand progress, accelerating generator retirements, and delays in useful resource growth, the North American Electrical Reliability Company (NERC) has warned in its newest 2024 Lengthy-Time period Reliability Evaluation (LTRA).
The designated electrical reliability group’s (ERO’s) annual 10-year outlook centered on the North American bulk energy system’s reliability paints a sobering image riddled with interrelated dangers. The grid, already grappling with shrinking reliability margins and operational stress from the fast tempo of the vitality transition, is ill-equipped to deal with the forecasted demand progress, it suggests. Mounting vulnerabilities are rooted in uncertainties, together with climate variability and excessive temperatures, the fast addition of enormous new masses resembling knowledge facilities, and chronic delays in era substitute and transmission growth.
“Merely put, our infrastructure is just not being constructed quick sufficient to maintain up with the rising demand,” stated John Moura, NERC’s director of Reliability Assessments and Planning Evaluation. “Collaboration, urgency, and foresight are actually not negotiable. Policymakers, {industry} leaders, and stakeholders throughout North America should work collectively to allow the enlargement of the majority energy system [and] guarantee new sources can interconnect successfully, reliably, and likewise keep reliability that society depends upon,” he stated.
Following are the evaluation’s most outstanding findings.
- Over Half of North America is at Elevated Danger of Vitality Shortages
- Generator Retirements Outpace Useful resource Additions
- Electrical energy Demand is Rising Quicker Than Ever
- Pure Fuel Infrastructure Stays a Reliability Concern
- Transmission Growth Reveals Promise However Faces Obstacles
1. Over Half of North America Is at Elevated Danger of Vitality Shortages
NERC’s LTRA, a crucial instrument that informs decision-making throughout the vitality {industry}, is that this yr much more dismal than in 2023. In its 2023 LTRA launched final yr NERC first signaled a reversal of a decades-long development of falling or flat progress charges for forecasted demand and vitality, nevertheless it flagged useful resource adequacy considerations rising in areas just like the Midcontinent Impartial System Operator (MISO) and SERC-Central.
This yr’s report suggests dangers are pervasive and escalating. NERC recognized MISO as the one area thought of “excessive danger”—the place established useful resource adequacy targets is probably not within the subsequent 5 years. Nevertheless, it marked 10 different areas as “elevated-risk” areas—together with among the largest within the U.S.: PJM, the Electrical Reliability Council of Texas (ERCOT), California-Mexico, Southwest Energy Pool (SPP), and SERC-East. In Canada, all areas—except for WECC-Alberta and NPCC-Quebec—fell into “elevated danger” class, together with Ontario, Manitoba, SaskPower, and British Columbia. Whereas these areas will usually meet useful resource adequacy standards, “evaluation signifies that excessive climate circumstances are prone to trigger a shortfall in space reserves,” NERC defined.
A particular concern for NERC is that, for a number of areas, preliminary shortfall years are slated to start over the subsequent three years—2025 to 2028. The report cites various dangers, starting from insufficient useful resource additions and accelerating generator retirements to excessive climate vulnerabilities.
- MISO (Excessive-Danger). Coal-fired generator retirements and delayed useful resource additions are anticipated to drop reserve margins under Reference Margin Ranges (RMLs) beginning in 2025, with a projected 2.7 GW shortfall by 2029, regardless of 56 GW of deliberate photo voltaic and battery tasks.
- NPCC-New England (Elevated Danger). Unprecedented demand progress pushed by electrification, coupled with persistent winter pure fuel constraints, might increase dangers of provide shortfalls by 2026, and excessive chilly spells might additional problem reliability.
- NPCC-Ontario (Elevated Danger). Reserve margin gaps projected to start in 2027 are tied to nuclear refurbishment outages, expiring useful resource contracts, and rising demand, although 1.8 GW of battery tasks and 600 MW of imports from Hydro-Québec search to handle these shortfalls.
- Texas RE-ERCOT (Elevated Danger). Explosive demand progress pushed by 20 GW of recent massive masses, alongside a extra variable and fewer dispatchable useful resource combine, might considerably improve the danger of long-duration winter shortfalls by 2026, regardless of sturdy photo voltaic and battery additions.
- WECC-California/Mexico (Elevated Danger). Useful resource adequacy enhancements from battery and photo voltaic PV additions and the Diablo Canyon nuclear extension scale back dangers, however provide shortfalls throughout night photo voltaic downramps and gas-fired retirements might stay a priority by 2028.
- WECC-British Columbia (Elevated Danger). Whereas average demand progress and hydroelectric reliance keep stability below regular circumstances, excessive chilly climate by 2028 might result in as much as 5 hours of unserved vitality as a result of restricted imports from neighboring areas.
NERC famous that one cause for its expanded danger profile this yr is that it used each a probabilistic evaluation and a reserve margin evaluation to evaluate the danger of future electrical energy provide shortfalls. “For this yr’s evaluation, we integrated extra software of vitality danger metrics which can be able to find shortfall dangers because the useful resource combine is altering and there’s extra variability in useful resource output, and likewise because the demand is changing into extra variable in it in future years,” NERC Supervisor of Reliability Assessments Mark Olson defined on Tuesday.
2. Generator Retirements Outpace Useful resource Additions
A particular concern underscored within the report is that—preserving tempo with the 2023 LTRA—confirmed generator retirements over the subsequent decade will attain 52 GW in 2029 and mark 78 GW over the 10-year interval. “Introduced retirements, which embrace many turbines that haven’t begun formal deactivation processes with planning entities, complete 115 GW over the 10-year interval,” it notes. (That represents about 10% of the 1,189 GW of complete put in capability within the U.S. on the finish of 2023.)
The extra generator retirements—of about 37 GW—”would spur a necessity for extra sources, much more than what we see to handle the vitality and capability shortfalls already proven, and that would result in a reserve margin shortfall in just about each space of the North American system between now and the subsequent 10 years,” stated Olson. “It actually factors to the crucial want that generator retirements should be managed in an orderly approach and be certain that the reliability and vitality wants of the system are taken care of.”
In the meantime, although the LTRA finds whereas the general useful resource capability on the system has grown barely because the earlier LTRA, it’s “considerably much less” than what the LTRA anticipated,” Olson stated. “That creates considerations that as demand is rising at a higher tempo, useful resource progress is just not rising and never maintaining with the projection.”
On the identical time, the interconnection queue has grown by about 12% over the previous yr, however the precise integration of these sources into the system has lagged, he famous. That’s notably evident in photo voltaic PV, the place connections had been 14 GW decrease than projected in final yr’s LTRA. The exception to this point has been for battery storage, “which related extra capability than was projected in final yr’s LTRA,” he stated.
For now, photo voltaic PV nonetheless stays “the overwhelmingly predominant era kind” being added to the BPS, the evaluation notes, echoing earlier LTRAs. “As older fossil-fired turbines retire and are changed by extra photo voltaic PV and wind sources, the useful resource combine is changing into more and more variable and weather-dependent. Photo voltaic PV, wind, and different variable vitality sources (VER) contribute some fraction of their nameplate capability output to serving demand based mostly on the energy-producing inputs (e.g., photo voltaic irradiance, wind velocity),” it says.
The 2024 LTRA, nevertheless, factors out extra reliability implications which have come to the fore in recent times—and are slated to stay a priority. “The brand new sources even have totally different bodily and working traits from the turbines that they’re changing, affecting the important reliability companies (ERS) that the useful resource combine offers,” it explains. “As turbines are deactivated and changed by new varieties of sources, ERS should nonetheless be maintained for the grid to function reliably.”
Lastly, the report underscores the uncertainty posed by “vitality droughts,” the place simultaneous below-normal output from wind, photo voltaic, and hydro sources might result in provide shortages throughout irregular climate. Historic U.S. generator knowledge reveals regional patterns in vitality droughts, characterised by various period, magnitude, and seasonality, the report says. These occasions, that are extra probably throughout high-load durations, spotlight a crucial want for useful resource adequacy and storage planning, it suggests.
3. Electrical energy Demand Is Rising Quicker Than Ever
Energy provide considerations are in the meantime being compounded by a surge in electrical demand, which is being pushed by the fast build-out of information facilities, industrial growth, and electrification. “We’re seeing demand progress like we haven’t seen in many years,” Moura famous. “That progress is thrilling—it’s a sign of innovation and financial momentum. However as everyone knows, progress have to be met with reliability readiness.”
The forecast used within the LTRA notably reveals a 15% improve in summer time peak demand over the subsequent 10 years—a big acceleration of 132 GW within the 2024 LTRA in comparison with the 2023 LTRA. The winter peak progress is increased—at 18% over the 10-year interval: 149 GW, up from 92 GW within the 2023 LTRA.
The BPS is already seeing a “dual-peaking” development, the place peak season goes from summer time to winter, the LTRA says. “Within the U.S. Southeast, SERC-Central and SERC-East turned dual-peaking programs in recent times. SERC-Southeast not too long ago started experiencing barely increased peak demand in winter in comparison with summer time,” it notes. As electrification of heating programs and transportation continues, New England might transition to twin peaking within the mid-2030s, New York within the late 2030s, and Ontario in 2030, it says. Nevertheless, that would have implications for planning and operations. “For instance, useful resource output and gas dangers are considerably totally different in winter, requiring the main focus of useful resource adequacy processes to alter,” it notes.
The LTRA additionally hones in on massive industrial and industrial (C&I) demand progress and implications for his or her fast connections to the BPS. For NERC, a giant concern is visibility. “Rising massive masses, resembling knowledge facilities (together with crypto and AI) and hydrogen gas vegetation, current distinctive challenges to forecasting and planning for elevated demand,” it defined. “Earlier this yr, NERC’s RSTC established a Giant Masses Job Drive to higher perceive the reliability implications of progress in massive masses and develop options.”
Including massive parcels of load, resembling knowledge facilities and industrial services, introduces numerous uncertainties for system planners and operators, the report notes. Knowledge facilities, for instance, function longer hours and require intensive heating and cooling, resulting in extra persistent demand in comparison with different industrial buildings. In areas like Texas, cryptocurrency mining services have demonstrated the flexibility to scale operations based mostly on electrical energy costs, complicating forecasting much more. Moreover, customer-initiated, automated disconnection of sizeable masses throughout grid faults poses reliability dangers akin to points noticed with inverter-based sources (IBRs).
As Olson defined, “The forecast we’re utilizing for our evaluation reveals that accelerated progress—and the indications are there with the varieties of change, with the flexibility for knowledge facilities to be constructed and constructed rapidly—that a few of these drivers are prone to proceed to form the demand projection effectively into the longer term.”
Whereas {industry} works to pin down assumptions and estimates associated to connections, NERC’s job pressure will work with {industry} on “some technical practices across the massive knowledge middle masses,” he stated. “And I feel extra will occur subsequent yr as a piece plan will get underway with NERC and the {industry} on addressing reliability points with these.”
4. Pure Fuel Infrastructure Stays a Reliability Concern
One more rising reliability problem highlighted within the LTRA is the rising reliance on pure gas-fired era and the crucial interdependencies between fuel and electrical programs. This situation has advanced into an industry-wide crucial as a result of pivotal function pure fuel performs in assembly electrical energy demand throughout peak durations, particularly in winter.
“Through the years, we’re going to change into extra reliant on pure fuel as a main producing gas. We use it for baseload, mid-range, and peaking circumstances [because it’s] very versatile, however we’ve seen it has challenges, each in [terms of] mechanical operations throughout winter climate, particularly in your southern states, Texas included. [Additionally], there’s additionally restricted fuel to go round on the times that you just want it,” stated Moura.
Pure-gas-fired turbines present crucial attributes for grid reliability, resembling inertia, frequency response, and ramping flexibility. Nevertheless, they usually depend on interruptible, non-firm gas provide contracts that may be reduce off in periods of excessive demand. “What we discover is that when there’s not sufficient fuel to go round, a whole lot of these turbines which can be on it get interrupted. [They can’t] provide electrical energy, can’t generate electrical energy, and even some agency clients have challenges getting fuel as a result of manufacturing wells which can be very far-off would possibly freeze up,” Moura defined.
The problem was underscored by extreme winter climate occasions in 2021 and 2022, which highlighted the vulnerability of pure fuel provide chains in periods of maximum electrical energy demand. Compounding the issue is the rising use of pure fuel by energy turbines—projected to exceed 40% of delivered pure fuel in 2024. Throughout excessive climate occasions, pure fuel demand spikes not just for electrical energy era but additionally for heating, straining provide strains and creating the potential for provide shortfalls, the LTRA notes.
Addressing these gas-electric interdependencies would require a collaborative, system-wide strategy, Moura added. Collaboration is already underway. Earlier this week, the American Fuel Affiliation (AGA) convened the inaugural Pure Fuel Readiness Discussion board in Atlanta, bringing collectively vitality commerce associations, authorities representatives, and {industry} stakeholders. NERC officers participated within the discussion board. The discussion board, notably, was a advice by the Nationwide Affiliation of Regulatory Utility Commissioners’ (NARUC) Fuel-Electrical Alignment for Reliability (GEAR) Working Group. It emphasised operational training, situational consciousness, and collaboration to bolster reliability throughout excessive climate occasions, NARUC stated in an announcement despatched to POWER. “GEAR was established to not produce a report, to do further evaluation, or to take a look at the previous, however to look to the longer term and search for methods to get alignment and put ahead options,” stated NARUC President and Georgia Public Service Commissioner Tricia Pridemore.
5. Transmission Growth Reveals Promise However Faces Obstacles
In line with Olson, a vibrant spot on this yr’s LTRA is the outlook for transmission growth. Greater than 28,000 miles of transmission (>100 kV) both below building or in numerous phases of growth over the subsequent 10 years—a dramatic improve from the 18,675 miles projected within the 2023 LTRA. That represents a big leap in comparison with the previous 5 years, throughout which a median of 18,900 miles of transmission tasks had been deliberate every decade, the report notes. Nevertheless, a lot of this improve stays within the planning phases, with restricted progress in precise building.
“The miles of recent tasks which have truly moved into the development section actually [have] not elevated in comparison with final yr,” Olson famous. He highlighted ongoing challenges, together with siting and allowing delays, which proceed to hinder over 1,200 miles of transmission tasks. One other important barrier is cost-sharing for tasks that ship reliability advantages throughout a number of areas.
To deal with these challenges, regional planning improvements are rising, such because the joint transmission planning assemble launched by MISO and SPP, which goals to streamline growth alongside their shared borders. Whereas reliability stays the first driver for many of the reported tasks, the LTRA highlights the rising significance of transmission infrastructure in integrating renewable vitality and enhancing switch functionality. This functionality is crucial for making certain vitality can circulate from areas of surplus to areas of shortage throughout excessive circumstances, underscoring the urgency of advancing stalled tasks to bolster grid resilience and reliability.
Precedence Actions to Deal with Rising Dangers
NERC’s 2024 LTRA underscores 5 key suggestions to mitigate vitality and capability dangers. First, planners, market operators, and regulators should rigorously handle generator retirements through the use of mechanisms to lengthen the service of turbines crucial for reliability till substitute infrastructure is operational. Regulators also needs to streamline siting and allowing processes to handle the numerous delays in useful resource and transmission growth. NERC and its Regional Entities are known as upon to boost the LTRA by standardizing probabilistic evaluation strategies and performing wide-area vitality assessments to account for excessive climate and gas provide dangers.
Moreover, stronger collaboration is required between the pure fuel and electrical sectors to handle their rising interdependencies. Initiatives like NARUC’s Fuel-Electrical Alignment for Reliability (GEAR) job pressure and NERC’s enhanced winter readiness requirements are constructive steps. Lastly, regional transmission organizations and impartial system operators should proceed adapting planning approaches to make sure important reliability companies (ERSs) like voltage and frequency assist are maintained because the useful resource combine transitions to renewables. These efforts, mixed with sturdy insurance policies and market mechanisms, are important to sustaining a resilient bulk energy system.
—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).
