The North American Electric Reliability Corporation (NERC) has issued a warning that forecasts for peak electricity demand are sharply rising and that there could be an increase in the number of power plant retirements. These trends have raised alarms about the stability of electric power over the coming decade.
According to the 2023 Long-Term Reliability Assessment (LTRA) by NERC, the electric industry is under growing strain to meet the rapidly increasing demand for electricity and to maintain a sufficient transmission system as the energy generation portfolio evolves.
John Moura, NERC’s director of Reliability Assessment and Performance Analysis, stated in a press release, “We are witnessing a significant escalation in the risks to reliability and energy certainty.”
“Reliability has been on a downward trend in recent years, and future projections do not clearly indicate how we will ensure a stable electric supply, which is vital for the health, safety, and economic well-being of our communities.”
The report indicates that since the 2022 LTRA, there has been a considerable rise in the growth rates of predicted peak demand and energy consumption, reversing a long-standing pattern of stable or declining growth. The push toward electric vehicle use, data center expansion, and electrification is driving these heightened forecasts.
Furthermore, the shift to electric heating systems is sharply affecting seasonal demand patterns, with some regions in the US, especially the Northeast and Southeast, potentially moving from summer-dominated peaks to winter or dual-season peaks.
The Corporation forecasts that over 83 gigawatts of fossil fuel and nuclear generation capacity will be retired by 2033, with additional retirements likely to be announced.
During this period, the energy sector continues to shift, with additions in wind, solar photovoltaic, and battery storage resources.
The 2023 LTRA reveals that most regions are confronting challenges with resource adequacy. Many are projected to face reserve deficits or emerging energy risks in the coming years. Moreover, the changing resource mix is raising concerns about fuel supply due to increased reliance on just-in-time natural gas deliveries for power generation.
Mark Olson, NERC’s manager of Reliability Assessment, commented that this year’s assessment emphasizes the critical dependency between the electric and gas industries as a major concern for future reliability.
He pointed out that extreme cold weather events like Winter Storms Uri and Elliott have disrupted natural gas supplies to power plants. This disruption can lead to electricity shortages and further impact natural gas infrastructure, resulting in more severe consequences for the entire energy system.
The report also notes an uptick in bulk power system transmission projects labeled as “under construction” or “planned for construction” within the next decade.
These transmission projects are initiated to accommodate new generation connections and boost reliability. Nevertheless, challenges with siting and permitting are causing delays in expanding transmission infrastructure.
While regional transmission planning processes are evolving to handle the energy transition, obstacles to developing transmission systems persist.
The analysis of energy and capacity also points out an enlarging area at risk of electricity supply shortfalls in the future.
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