U.S. grids face greater risks as generators retire, demand rises - NERC
By Nicole Jao
NEW YORK, Dec 13 (Reuters) - U.S. power grids will face more vulnerability than previously thought in coming years as peak demand increases and old generators retire, the North American Electric Reliability Corporation(NERC) said in a webcast on Wednesday.
The group painted a bleak picture for some power markets in the U.S., as wide-scale electrification spurs demand to grow at a faster pace than new generation capacity additions, and as old facilities retire. Those markets could face capacity shortfalls as a result, NERC said.
"New environmental regulations and incentives are likely to drive even higher levels of retirements than what we've accounted for," said Mark Olson, NERC's manager for reliability assessments.
More areas are at risk over the next 10 years than previously reported, Olson added.
The Biden administration's commitment to shift to carbon-free electricity generation by 2035 has spurred electrification of transportation, heating and other sectors and accelerated the retirements of fossil-fuel based generators.
Generation capacity is projected to grow moderately for the next 10 years as old units retire, NERC's 2023 Long-term Reliability Assessment shows.
However, peak electricity demand during both summer and winter months is expected to accelerate in many areas, driven by electrification and adoption of electric vehicles and data centers.
Energy markets managed by grid operators Midcontinent ISO and SERC Reliability Corp, which together spans across 18 Midwestern and Southern states and parts of Canada, are at high risk of experiencing capacity shortfalls in the coming years, NERC said.
Other regions, including New York, New England, Texas and California are anticipated experience reliability issues during periods of prolonged cold and hot temperatures or when wind and solar output are low, it added.
Increases in energy demand from cryptocurrency mining, data centers, smelters and manufacturing may also pose reliability issues in the coming years, NERC said.
Ongoing supply chain issues with transformers and other critical grid components and insufficient capacity of black start generators, which help restart power grids after a collapse, are emerging issues can threaten system reliability in the future.
Transmission systems can help alleviate power supply issues but delays in planning continue stifle the expansion of new projects.
“NERC’s latest assessment paints another grim picture of our nation’s energy future as demand for electricity soars and the supply of always-available generation declines,” said Jim Matheson, CEO of National Rural Electric Cooperative Association, in a statement. (Reporting by Nicole Jao; Editing by Aurora Ellis)