NERC long-term analysis finds demand growth outpacing transmission growth, among other trends

In a 10-year outlook of the energy transition, the North American Electric Reliability Corporation (NERC) last week concluded that planners and grid operators must increasingly factor in different aspects and performance of resources being brought online – or not, in some cases.

The 2022 Long-Term Reliability Assessment identified five trends: integration of inverter-based resources (IBRs), growth of distributed energy resources (DERs), generation retirements, increased demand growth, and flat transmission growth. The last two, paired together, could prove particularly problematic for the bulk power system and emphasized the need for proper planning, according to the report.

For example, it pointed to the Midcontinent Independent System Operator (MIS), which could face a shortfall of 1,300 MW next summer that increases yearly for the next 10 years as retirements outpace replacement resources. It also attached a reserve margin shortfall likely to hit Ontario as of 2025 and grow over the following years as generation retires and nuclear units go under planned maintenance outages. Likewise, in California, energy shortfalls of 1-10 hours could crop up as variable resource output and changing demands grip the state.

“The bulk power system is undergoing unprecedented change on a scale and at a speed that challenges the ability to foresee and design for its future state,” John Moura, NERC’s director of Reliability Assessment and Performance Analysis, said. “Managing the transformation and proactively preparing for the role that the grid will play is the greatest challenge to reliability over the next 10 years.”

However, balancing retirements and growth will not be the only area requiring advanced thinking. While most areas should have adequate electricity resources to endure the demands of normal weather, NERC determined that reserves in some areas are likely insufficient. The U.S. Western Interconnection, Texas, New England, and the Southwest Power Pool were all deemed at elevated risk of shortfall under extreme strain.

To change that, NERC recommended industry and regulators account for all-hours energy availability analyses when pursuing resource adequacy and factor extreme condition criteria into integrated resource planning and wholesale market designs. It encouraged the Electric Reliability Organization and industry to prioritize the development of Reliability Standard requirements for energy risks and to plan for and adapt the bulk system to work with increased amounts of IBRs and DERs. Lastly, the report urged these same planners to enhance guidelines for assessing and reducing risks through system and resource planning studies and create Reliability Standards requirements to guarantee corrective actions and benefit interdependent electricity and natural gas infrastructure reliability.